Item 15. Exhibits, Financial Statement Schedules

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Item 15. Exhibits, Financial Statement Schedules

(a)(1) Financial Statements

The following consolidated financial statements of NRG Energy, Inc. and related notes thereto, together with the reports thereon of KPMG LLP, Philadelphia, PA, Auditor Firm ID: 185, are included herein:

Consolidated Statements of Operations — Years ended December 31, 2024, 2023, and 2022

Consolidated Statements of Comprehensive Income/(Loss) — Years ended December 31, 2024, 2023, and 2022

Consolidated Balance Sheets — As of December 31, 2024 and 2023

Consolidated Statements of Cash Flows — Years ended December 31, 2024, 2023, and 2022

Consolidated Statements of Stockholders' Equity — Years ended December 31, 2024, 2023, and 2022

Notes to Consolidated Financial Statements

(a)(2) Financial Statement Schedule

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

Schedule II — Valuation and Qualifying Accounts

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

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

(b) Exhibits

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

NRG Energy, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of NRG Energy, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income/(loss), stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, 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, 2024, 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 26, 2025 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

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

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

Critical Audit Matter

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

Evaluation of the sufficiency of audit evidence over revenues

As discussed in Note 3 to the consolidated financial statements, the Company had $28,130 million of revenues. Revenue is derived from various revenue streams in different geographic markets and the Company’s processes and related information technology (IT) systems used to record revenue differ for each of these revenue streams.

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

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

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

/s/ KPMG LLP

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

Philadelphia, Pennsylvania

February 26, 2025

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Year Ended December 31,
(In millions, except per share amounts)	2024		2023		2022
Revenue
Revenue	$	28,130	$	28,823	$	31,543
Operating Costs and Expenses
Cost of operations (excluding depreciation and amortization shown below)	22,100		26,483		27,443
Depreciation and amortization	1,403		1,295		720
Impairment losses	36		26		206
Selling, general and administrative costs (excluding amortization of customer acquisition costs of $204, $125 and $83, respectively, which are included in depreciation and amortization shown separately above)	2,031		1,843		1,145
Provision for credit losses	314		251		11
Acquisition-related transaction and integration costs	30		119		52
Total operating costs and expenses	25,914		30,017		29,577

Gain on sale of assets	208		1,578		52
Operating Income	2,424		384		2,018
Other Income/(Expense)
Equity in earnings of unconsolidated affiliates	20		16		6
Impairment losses on investments	(7)		(102)		—
Other income, net	44		47		56

(Loss)/Gain on debt extinguishment	(382)		109		—
Interest expense	(651)		(667)		(417)
Total other expense	(976)		(597)		(355)
Income/(Loss) Before Income Taxes	1,448		(213)		1,663
Income tax expense/(benefit)	323		(11)		442


Net Income/(Loss)	1,125		(202)		1,221
Less: Cumulative dividends attributable to Series A Preferred Stock	67		54		—
Net Income/(Loss) Available for Common Stockholders	$	1,058	$	(256)	$	1,221
Income/(Loss) Per Share
Weighted average number of common shares outstanding — basic	206		228		236


Income/(Loss) per Weighted Average Common Share — Basic	$	5.14	$	(1.12)	$	5.17
Weighted average number of common shares outstanding — diluted	212		228		236


Income/(Loss) per Weighted Average Common Share — Diluted	$	4.99	$	(1.12)	$	5.17

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)


	For the Year Ended December 31,
(In millions)	2024		2023		2022
Net Income/(Loss)	$	1,125	$	(202)	$	1,221
Other Comprehensive (Loss)/Income, net of tax

Foreign currency translation adjustments	(22)		9		(35)

Defined benefit plans	(4)		30		(16)
Other comprehensive (loss)/income	(26)		39		(51)
Comprehensive Income/(Loss)	$	1,099	$	(163)	$	1,170

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	As of December 31,
(In millions)	2024		2023
ASSETS
Current Assets
Cash and cash equivalents	$	966	$	541
Funds deposited by counterparties	199		84
Restricted cash	8		24
Accounts receivable, net	3,488		3,542

Inventory	478		607
Derivative instruments	2,686		3,862
Cash collateral paid in support of energy risk management activities	309		441

Prepayments and other current assets	830		626


Total current assets	8,964		9,727
Property, plant and equipment, net	2,021		1,763
Other Assets
Equity investments in affiliates	45		42
Operating lease right-of-use assets, net	151		179

Goodwill	5,011		5,079
Customer relationships, net	1,538		2,164
Other intangible assets, net	1,370		1,763

Derivative instruments	1,710		2,293
Deferred income taxes	2,067		2,251
Other non-current assets	1,145		777


Total other assets	13,037		14,548
Total Assets	$	24,022	$	26,038

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)


	As of December 31,
(In millions, except share data)	2024		2023
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt and finance leases	$	996	$	620
Current portion of operating lease liabilities	66		90
Accounts payable	2,513		2,325

Derivative instruments	2,297		4,019
Cash collateral received in support of energy risk management activities	199		84
Deferred revenue current	711		720
Accrued expenses and other current liabilities	2,031		1,642



Total current liabilities	8,813		9,500
Other Liabilities
Long-term debt and finance leases	9,812		10,133
Non-current operating lease liabilities	117		128



Derivative instruments	1,107		1,488
Deferred income taxes	12		22
Deferred revenue non-current	862		914
Other non-current liabilities	821		947


Total other liabilities	12,731		13,632
Total Liabilities	21,544		23,132

Commitments and Contingencies
Stockholders' Equity
Preferred stock; 10,000,000 shares authorized; 650,000 Series A shares issued and outstanding at December 31, 2024 and 2023 (aggregate liquidation preference $650)	650		650
Common stock; $0.01 par value; 500,000,000 shares authorized; 205,064,058 and 267,330,470 shares issued; and 198,604,003 and 208,130,950 shares outstanding at December 31, 2024 and 2023, respectively	2		3
Additional paid-in capital	705		3,416
Retained earnings	1,535		820
Treasury stock, at cost; 6,460,055 and 59,199,520 shares at December 31, 2024 and 2023, respectively	(297)		(1,892)
Accumulated other comprehensive loss	(117)		(91)
Total Stockholders' Equity	2,478		2,906
Total Liabilities and Stockholders' Equity	$	24,022	$	26,038

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Year Ended December 31,
(In millions)	2024		2023		2022
Cash Flows from Operating Activities
Net Income/(Loss)	$	1,125	$	(202)	$	1,221


Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of unconsolidated affiliates, net of distributions	(13)		(6)		7
Depreciation of property, plant and equipment and amortization of customer relationships and other intangible assets	1,071		1,127		634
Amortization of capitalized contract costs	332		168		86
Accretion of asset retirement obligations	34		27		55
Provision for credit losses	314		251		11
Amortization of nuclear fuel	—		47		54
Amortization of financing costs and debt discounts	39		52		23
Loss/(Gain) on debt extinguishment	382		(109)		—
Amortization of in-the-money contracts and emissions allowances	105		137		158
Amortization of unearned equity compensation	102		101		28
Net gain on sale of assets and disposal of assets	(192)		(1,559)		(102)

Impairment losses	43		128		206
Changes in derivative instruments	(337)		2,455		(3,221)
Changes in current and deferred income taxes and liability for uncertain tax benefits	165		(92)		382

Changes in collateral deposits in support of risk management activities	245		(1,806)		896

Changes in nuclear decommissioning trust liability	—		—		9

Uplift securitization proceeds received from ERCOT	—		—		689


Cash (used)/provided by changes in other working capital:
Accounts receivable - trade	(366)		840		(1,560)
Inventory	111		189		(252)
Prepayments and other current assets	(539)		(401)		(69)
Accounts payable	170		(1,455)		1,295
Accrued expenses and other current liabilities	136		360		(29)
Other assets and liabilities	(621)		(473)		(161)
Cash provided/(used) by operating activities	$	2,306	$	(221)	$	360


Cash Flows from Investing Activities
Payments for acquisitions of businesses and assets, net of cash acquired	$	(38)	$	(2,523)	$	(62)
Capital expenditures	(472)		(598)		(367)
Proceeds from sale of assets, net of cash disposed	501		2,007		109


Net purchases of emissions allowances	(18)		(24)		(6)
Proceeds from insurance recoveries for property, plant and equipment, net	3		240		—
Investments in nuclear decommissioning trust fund securities	—		(367)		(454)
Proceeds from sales of nuclear decommissioning trust fund securities	—		355		448



Cash used by investing activities	$	(24)	$	(910)	$	(332)


	For the Year Ended December 31,
(In millions)	2024		2023		2022
Cash Flows from Financing Activities
Proceeds from issuance of preferred stock, net of fees	$	—	$	635	$	—
Payments for share repurchase activity and excise tax(a)	(935)		(1,150)		(600)
Equivalent shares purchased in lieu of tax withholdings	(50)		(22)		(6)
Payments of dividends to preferred and common stockholders	(405)		(381)		(332)
Proceeds from issuance of long-term debt	3,200		731		—
Payments for current and long-term debt	(3,255)		(523)		(5)

Payments for debt extinguishment costs	(262)		—		—
Payments of debt issuance costs	(45)		(32)		(9)
Net (payments)/receipts from settlement of acquired derivatives that include financing elements	(3)		342		1,995

Proceeds from credit facilities	1,050		3,020		—
Repayments to credit facilities	(1,050)		(3,020)		—


Cash (used)/provided by financing activities	$	(1,755)	$	(400)	$	1,043


Effect of exchange rate changes on cash and cash equivalents	(3)		2		(3)

Net (Decrease)/Increase in Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash	524		(1,529)		1,068
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at Beginning of Period	649		2,178		1,110
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at End of Period	$	1,173	$	649	$	2,178

(a)Includes excise tax paid of $10 million during the year ended December 31, 2024

For further discussion of supplemental cash flow information see Note 25, Cash Flow Information

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


(In millions)	Preferred Stock		Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Stock-holders' Equity
Balance at December 31, 2021	$	—	$	4	$	8,531	$	464	$	(5,273)	$	(126)	$	3,600
Net income							1,221						1,221
Other comprehensive loss											(51)		(51)

Shares reissuance for ESPP					2				4				6
Share repurchases									(595)				(595)
Equity-based awards activity, net(a)					24								24

Common stock dividends and dividend equivalents declared(b)							(334)						(334)
Adoption of ASU 2020-06					(100)		57						(43)
Balance at December 31, 2022	$	—	$	4	$	8,457	$	1,408	$	(5,864)	$	(177)	$	3,828
Net loss							(202)						(202)
Issuance of Series A Preferred Stock	650				(15)								635
Other comprehensive income											39		39

Shares reissuance for ESPP					2				6				8
Share repurchases(c)					(117)				(1,043)				(1,160)
Retirement of treasury stock(d)			(1)		(5,008)				5,009				—
Equity-based awards activity, net(a)					97								97

Common stock dividends and dividend equivalents declared(b)							(352)						(352)
Series A Preferred Stock dividends(e)							(34)						(34)
Sale of the 44% equity interest in STP											47		47
Balance at December 31, 2023	$	650	$	3	$	3,416	$	820	$	(1,892)	$	(91)	$	2,906
Net income							1,125						1,125
Other comprehensive loss											(26)		(26)
Shares reissuance for ESPP					5				8				13
Share repurchases(c)					117				(1,051)				(934)
Retirement of treasury stock(d)			(1)		(2,637)				2,638				—
Equity-based awards activity, net(a)					57								57
Common stock dividends and dividend equivalents declared(b)							(343)						(343)
Series A Preferred Stock dividends(e)							(67)						(67)
Capped Call Options(f)					(253)								(253)
Balance at December 31, 2024	$	650	$	2	$	705	$	1,535	$	(297)	$	(117)	$	2,478

(a)Includes $(50) million, $(22) million and $(6) million of equivalent shares purchased in lieu of tax withholding on equity compensation issuances for the years ended December 31, 2024, 2023 and 2022, respectively

(b)Dividends per common share were $1.63, $1.51 and $1.40 for each of the years ended December 31, 2024, 2023 and 2022, respectively

(c)Includes excise tax accrued of $9 million and $10 million for the years ended December 31, 2024 and 2023, respectively. For further discussion of the share repurchases, see Item 15 — Note 15**,** Capital Structure

(d)For further discussion of the treasury stock retirements, see Item 15 — Note 15**,** Capital Structure

(e)Dividends per share of Series A Preferred Stock were $51.25 for each of the periods ended September 15 and March 15, 2024 and $52.96 for the period ended September 15, 2023

(f)For further discussion of the Capped Call Options, see Item 15 — Note 15**,** Capital Structure

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Nature of Business

General

NRG Energy, Inc., or NRG or the Company, is a leading energy and smart home company fueled by market-leading brands, proprietary technologies, and complementary sales channels. Across the United States and Canada, NRG delivers innovative, sustainable solutions, predominately under the brand names such as NRG, Reliant, Direct Energy, Green Mountain Energy and Vivint, while also advocating for competitive energy markets and customer choice. The Company has a customer base that includes approximately 8 million residential customers (comprised of 6 million retail energy customers and 2 million smart home customers) in addition to commercial, industrial, and wholesale customers, supported by approximately 13 GW of generation as of December 31, 2024.

The Company's business is segmented as follows:

Texas, which includes all activity related to customer, plant and market operations in Texas, other than Cottonwood;
East, which includes all activity related to customer, plant and market operations in the East;
West/Services/Other, which includes the following assets and activities: (i) all activity related to customer, plant and market operations in the West and Canada, and (ii) activity related to the Cottonwood facility and other investments;
Vivint Smart Home; and
Corporate activities.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The Company's consolidated financial statements have been prepared in accordance with U.S. GAAP. The ASC, established by the FASB, is the source of authoritative U.S. GAAP to be applied by nongovernmental entities. In addition, the rules and interpretative releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants.

The consolidated financial statements include NRG's accounts and operations and those of its subsidiaries in which the Company has a controlling interest. All significant intercompany transactions and balances have been eliminated in consolidation. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests. As such, NRG applies the guidance of ASC 810, Consolidations, or ASC 810, to determine when an entity that is insufficiently capitalized or not controlled through its voting interests, referred to as a VIE, should be consolidated.

Presentation Adjustments

Beginning in the third quarter of 2024, the Company is recording the amortization of capitalized contracts costs within depreciation and amortization. This change, along with additional financial statement disclosures, is meant to address investor inquiries by enhancing transparency to easier match expenses with revenues. NRG previously recorded amortization of capitalized contract costs related to fulfillment in cost of operations and amortization of capitalized contract costs related to customer acquisition primarily in selling, general and administrative costs in the consolidated statements of operations. Prior years amounts were adjusted for comparative purposes. The adjustments had no impact on the Company’s total operating costs and expenses, and total cash flows.

The following table presents adjustments within the consolidated statement of operations for the years ended December 31, 2023 and 2022 related to capitalized contract costs:


(In millions)	As Previously Presented		Presentation Adjustments		As Adjusted
Year ended December 31, 2023
Cost of operations (excluding depreciation and amortization shown below)	$	26,526	$	(43)	$	26,483
Depreciation and amortization	1,127		168		1,295
Selling, general and administrative costs	1,968		(125)		1,843
Year ended December 31, 2022
Cost of operations (excluding depreciation and amortization shown below)	$	27,446	$	(3)	$	27,443
Depreciation and amortization	634		86		720
Selling, general and administrative costs	1,228		(83)		1,145

The following table presents adjustments within the consolidated statement of cash flows for the years ended December 31, 2023 and 2022 related to capitalized contract costs:


(In millions)	As Previously Presented		Presentation Adjustments		As Adjusted
Year ended December 31, 2023
Cash flows from operating activities:
Amortization of capitalized contract costs	$	—	$	168	$	168
Prepayments and other current assets	(233)		(168)		(401)
Year ended December 31, 2022
Cash flows from operating activities:
Amortization of capitalized contract costs	$	—	$	86	$	86
Prepayments and other current assets	17		(86)		(69)

Winter Storm Uri Uplift Securitization Proceeds

In May 2021, the Texas Legislature passed House Bill (“HB”) 4492 to mitigate exceptionally high price adders and ancillary service costs incurred by ERCOT 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 online reliability deployment price adders during Winter Storm Uri.

In December 2021, ERCOT filed with the PUCT a calculation of each LSE’s share of proceeds based on the settlement methodology. The Company accounted for the proceeds by analogy to the contribution model within ASC 958-605, Not-for-Profit Entities- Revenue Recognition and the grant model within IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, as a reduction to expenses in the consolidated statements of operations in the 2021 annual period for which the proceeds were intended to compensate. In June 2022, the Company received proceeds of $689 million from ERCOT in relation with HB 4492.

Credit Losses

In accordance with ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU No. 2016-13, retail trade receivables are reported on the balance sheet net of the allowance for credit losses within accounts receivables, net. Long-term receivables are recorded net in other non-current assets on the consolidated balance sheet. The Company accrues an allowance for current expected credit losses based on (i) estimates of uncollectible revenues by analyzing accounts receivable aging and current and reasonable forecasts of expected economic factors including, but not limited to, unemployment rates and weather-related events, (ii) historical collections and delinquencies, and (iii) counterparty credit ratings for commercial and industrial customers. The Company writes off customer contract receivable balances against the allowance for credit losses when it is determined a receivable is uncollectible.

The following table presents the activity in the allowance for credit losses for the years ended December 31, 2024, 2023, and 2022:


	Year Ended December 31,
(In millions)	2024		2023		2022
Beginning balance	$	145	$	133	$	683
Acquired balance from Vivint Smart Home	—		22		—
Provision for credit losses(a)	314		251		11
Write-offs	(363)		(313)		(593)
Recoveries collected	38		39		32
Other	18		13		—
Ending balance(a)	$	152	$	145	$	133

(a)Includes bilateral finance hedging risk of $(70) million accounted for under ASC 815 for the year ended December 31, 2022

During the year ended December 31, 2022, the provision for credit losses included the Company's loss mitigation efforts recognized as income of $126 million related to Winter Storm Uri. The increase in write-offs during the year ended December 31, 2022 was primarily due to the resolution of credit losses that occurred during Winter Storm Uri.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with an original maturity of three months or less at the time of purchase.

Funds Deposited by Counterparties

Funds deposited by counterparties consist of cash held by the Company as a result of collateral posting obligations from its counterparties related to NRG's hedging program. The increase in funds deposited by counterparties is driven by the increase in forward positions as a result of increases in natural gas and power prices compared to December 31, 2023. Though some amounts are segregated into separate accounts, not all funds are contractually restricted. Based on the Company's intention, these funds are not available for the payment of general corporate obligations; however, they are available for liquidity management. Depending on market fluctuations and the settlement of the underlying contracts, the Company will refund this collateral to the hedge counterparties pursuant to the terms and conditions of the underlying trades. Since collateral requirements fluctuate daily and the Company cannot predict if any collateral will be held for more than twelve months, the funds deposited by counterparties are classified as a current asset on the Company's balance sheet, with an offsetting liability for this cash collateral received within current liabilities.

Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, restricted cash and funds deposited by counterparties reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows.


	Year Ended December 31,
(In millions)	2024		2023		2022
Cash and cash equivalents	$	966	$	541	$	430
Funds deposited by counterparties	199		84		1,708
Restricted cash	8		24		40
Cash and cash equivalents, funds deposited by counterparties and restricted cash shown in the statements of cash flows	$	1,173	$	649	$	2,178

Restricted cash consists primarily of funds held within the Company's projects that are restricted in their use.

Inventory

Inventory is valued at the lower of weighted average cost or market, and consists principally of natural gas, fuel oil, coal, spare parts and finished goods. The Company removes natural gas inventory as goods are delivered to customers and as they are used in the production of electricity or steam. The Company removes fuel oil and coal inventories as they are used in the production of electricity. The Company removes spare parts inventories when they are used for repairs, maintenance or capital projects. The Company expects to recover the natural gas, fuel oil, coal and spare parts costs in the ordinary course of business. Inventory is valued at the lower of cost or net realizable value with cost being determined on a first in first out basis for finished goods and weighted average cost method for all other inventories. The Company removes finished goods inventories as they are

sold to customers. Inventories sold to customers as part of a smart home system are generally capitalized as contract costs. Sales of inventory are classified as an operating activity in the consolidated statements of cash flows.

Property, Plant and Equipment

Property, plant and equipment are stated at cost or, in the case of business acquisitions, acquisition date fair value; however, impairment adjustments are recorded whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Significant additions or improvements extending asset lives are capitalized as incurred, while repairs and maintenance that do not improve or extend the life of the respective asset are charged to expense as incurred. Depreciation, other than nuclear fuel, is computed using the straight-line method, while nuclear fuel was amortized based on units of production over the estimated useful lives. Certain assets and their related accumulated depreciation amounts are adjusted for asset retirements and disposals with the resulting gain or loss included in cost of operations in the consolidated statements of operations. For further discussion, see Note 8, Property, Plant and Equipment.

Business Interruption Insurance

The Company carries insurance policies to cover insurable risks including, but not limited to, business interruption. There were no business interruption insurance settlements during the year ended December 31, 2024. As a result of damage at the Limestone 1 and W.A. Parish 8 units, the Company recorded business interruption insurance settlements of $7 million and $81 million during the years ended December 31, 2023 and 2022, respectively. Business interruption insurance is recorded to cost of operations in the consolidated statements of operations and cash provided by operating activities in the consolidated statement of cash flows.

Asset Impairments

Long-lived assets that are held and used are reviewed for impairment whenever events or changes in circumstances indicate carrying values may not be recoverable. Such reviews are performed in accordance with ASC 360. An impairment loss is indicated if the total future estimated undiscounted cash flows expected from an asset are less than its carrying value. An impairment charge is measured by the difference between an asset's carrying amount and fair value with the difference recorded in operating costs and expenses in the consolidated statements of operations. Fair values are determined by a variety of valuation methods, including third-party appraisals, sales prices of similar assets and present value techniques.

Investments accounted for by the equity method are reviewed for impairment in accordance with ASC 323, Investments-Equity Method and Joint Ventures, or ASC 323, which requires that a loss in value of an investment that is an other-than-temporary decline should be recognized. The Company identifies and measures losses in the value of equity method investments based upon a comparison of fair value to carrying value. For further discussion of these matters, refer to Note 10, Asset Impairments.

Debt Issuance Costs

Debt issuance costs are capitalized and amortized as interest expense on a basis that approximates the effective interest method over the term of the related debt. Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt, or as an asset if the issuance costs relate to revolving debt agreements or certain other financing arrangements.

Intangible Assets

Intangible assets represent contractual rights held by the Company. The Company recognizes specifically identifiable intangible assets including emissions allowances, customer and supply contracts, customer relationships, marketing partnerships, technologies, trade names and fuel contracts when specific rights and contracts are acquired. These intangible assets are amortized based on expected volumes, expected delivery, expected discounted future net cash flows, straight line or units of production basis. As of December 31, 2024 and 2023, the Company had accumulated amortization related to its intangible assets of $3.6 billion and $3.0 billion, respectively.

Emission allowances held-for-sale, which are included in other non-current assets on the Company's consolidated balance sheet, are not amortized; they are carried at the lower of cost or fair value and reviewed for impairment in accordance with ASC 360.

For further discussion, see Note 11, Goodwill and Other Intangibles.

Goodwill

In accordance with ASC 350, Intangibles-Goodwill and Other, or ASC 350, the Company recognizes goodwill for the excess cost of an acquired entity over the net value assigned to assets acquired and liabilities assumed. NRG performs goodwill impairment tests annually, during the fourth quarter, and when events or changes in circumstances indicate that the carrying value may not be recoverable.

The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, there is no goodwill impairment.

In the absence of sufficient qualitative factors indicating that it is more-likely-than-not that no impairment occurred, the Company performs a quantitative assessment by determining the fair value of the reporting unit and comparing the fair value to its book value. If the fair value of the reporting unit exceeds its book value, goodwill of the reporting unit is not considered impaired. If the book value exceeds fair value, the Company recognizes an impairment loss equal to the difference between book value and fair value.

For further discussion of goodwill impairment losses recognized refer to Note 10, Asset Impairments.

Capitalized Contract Costs

Capitalized contract costs represent the costs directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts. These costs include installed products, commissions, other compensation and the cost of installation of new or upgraded customer contracts. The Company calculates amortization by accumulating all deferred contract costs into separate portfolios based on the initial month of service and amortizes those deferred contract costs on a straight-line basis over the expected period of benefit, consistent with the pattern in which the Company provides services to its customers. The expected period of benefit for customers is approximately five years. The Company updates its estimate of the expected period of benefit periodically and whenever events or circumstances indicate that the expected period of benefit could change significantly. Such changes, if any, are accounted for prospectively as a change in estimate. Amortization of capitalized contract costs are included in depreciation and amortization in the consolidated statements of operations. Contract costs not directly related and incremental to the origination of new contracts, modification of existing contracts or to the fulfillment of the related customer contracts are expensed as incurred.

Depreciation and Amortization

The Company's depreciation and amortization included in the consolidated statement of operations consisted of the following:


	For the Year Ended December 31,
(In millions)	2024		2023		2022
Amortization of capitalized contract costs related to fulfillment	$	120	$	37	$	—
Amortization of capitalized contract costs related to customer acquisition	212		131		86
Amortization of customer relationships and other intangible assets	800		870		343
Depreciation of property, plant and equipment	271		257		291
Total depreciation and amortization	$	1,403	$	1,295	$	720

Income Taxes

The Company accounts for income taxes using the liability method in accordance with ASC 740, Income Taxes, or ASC 740, which requires that the Company use the asset and liability method of accounting for deferred income taxes and provide deferred income taxes for all significant temporary differences.

The Company has two categories of income tax expense or benefit — current and deferred, as follows:

Current income tax expense or benefit consists solely of current taxes payable less applicable tax credits, and
Deferred income tax expense or benefit is the change in the net deferred income tax asset or liability, excluding amounts charged or credited to accumulated other comprehensive income

The Company reports some of its revenues and expenses differently for financial statement purposes than for income tax return purposes, resulting in temporary and permanent differences between the Company's financial statements and income tax returns. The tax effects of such temporary differences are recorded as either deferred income tax assets or deferred income tax liabilities in the Company's consolidated balance sheets. The Company measures its deferred income tax assets and deferred income tax liabilities using income tax rates that are expected to be in effect when the deferred tax is realized.

The Company accounts for uncertain tax positions in accordance with ASC 740, which applies to all tax positions related to income taxes. Under ASC 740, tax benefits are recognized when it is more-likely-than-not that a tax position will be sustained upon examination by the authorities. The benefit recognized from a position is the amount of benefit that has

surpassed the more-likely-than-not threshold, as it is more than 50% likely to be realized upon settlement. The Company recognizes interest and penalties accrued related to uncertain tax benefits as a component of income tax expense.

In accordance with ASC 740 and as discussed further in Note 19, Income Taxes, changes to existing net deferred tax assets or valuation allowances or changes to uncertain tax benefits, are recorded to income tax expense/(benefit).

Contract and Emission Credit Amortization

Assets and liabilities recognized through acquisitions related to the purchase and sale of energy and energy-related products in future periods for which the fair value has been determined to be significantly less or more than market are amortized to revenues or cost of operations over the term of each underlying contract based on actual generation and/or contracted volumes.

Emission credits represent the right to emit a specified amount of certain pollutants, including sulfur dioxide, nitrogen oxides and carbon dioxide, over a compliance period. Emission credits held for use are amortized to cost of operations based on the weighted average cost of the allowances held.

Gross Receipts and Sales Taxes

In connection with its retail sales, the Company records gross receipts taxes on a gross basis in revenues and cost of operations in its consolidated statements of operations. During the years ended December 31, 2024, 2023, and 2022, the Company's revenues and cost of operations included gross receipts taxes of $216 million, $212 million, and $218 million, respectively. Additionally, the Company records sales taxes collected from its taxable retail customers and remitted to the various governmental entities on a net basis; thus, there is no impact on the Company's consolidated statement of operations.

Cost of Operations

Cost of operations includes cost of fuel, purchased energy and other costs of sales, mark-to-market for economic hedging activities, contract and emission credit amortization, operations and maintenance, and other cost of operations.

Cost of Fuel, Purchased Energy and Other Cost of Sales

Cost of fuel is primarily the costs associated with procurement, transportation and storage of natural gas, nuclear fuel, oil and coal to operate the generation portfolio, which is expensed as the fuel is consumed. Purchased energy primarily relates to purchases to supply the Company's customer base, which includes spot market purchases, as well as contracts of various quantities and durations, including Renewable PPAs with third-party developers, which are primarily accounted for as NPNS (see further discussion in Derivative Instruments below). Other cost of sales primarily consists of TDSP expenses.

The cost of fuel is based on actual and estimated fuel usage for the applicable reporting period. The cost to deliver energy and related services to customers is based on actual and estimated supply volumes for the applicable reporting period. A portion of the cost of energy, $284 million, $240 million, and $202 million as of December 31, 2024, 2023, and 2022, respectively, was accrued and consisted of estimated transmission and distribution charges not yet billed by the transmission and distribution utilities.

In estimating supply volumes, the Company considers the effects of historical customer volumes, weather factors and usage by customer class. Transmission and distribution delivery fees are estimated using the same method used for electricity sales and services to retail customers. In addition, ISO fees are estimated based on historical trends, estimated supply volumes and initial ISO settlements. Volume estimates are then multiplied by the supply rate and recorded as cost of operations in the applicable reporting period.

Vivint Smart Home Flex Pay

Under the Flex Pay plan (“Flex Pay”), offered by Vivint Smart Home, customers pay separately for smart home products and services (smart home and security). The customer has the ability to pay for Vivint Smart Home products in the following three ways: (i) qualified customers may finance the purchase through third-party financing providers ("Consumer Financing Program" or “CFP”), (ii) Vivint Smart Home generally offers a limited number of customers not eligible for the CFP, but who qualify under Vivint Smart Home underwriting criteria, the option to enter into a retail installment contract directly with Vivint Smart Home or (iii) customers may conduct purchases by check, automatic clearing house payments, credit or debit card or by obtaining short-term financing (generally no more than six-month installment terms) through Vivint Smart Home.

Although customers pay separately for products and services under Flex Pay, the Company has determined that the sale of products and services are one single performance obligation resulting in deferred revenue for the gross amount of products sold. For products financed through the CFP, gross deferred revenues are reduced by (i) any fees the third-party financing provider (“Financing Provider”) is contractually entitled to receive at the time of loan origination, and (ii) the present value of expected future payments due to the Financing Providers. Loans are issued on either an installment or revolving basis with repayment terms ranging from 6 to 60 months.

For certain Financing Provider loans:

Vivint Smart Home pays a monthly fee based on either the average daily outstanding balance of the installment loans, or the number of outstanding loans.
Vivint Smart Home incurs fees at the time of the loan origination and receives proceeds that are net of these fees.
Vivint Smart Home also shares liability for credit losses.
Vivint Smart Home is responsible for reimbursing certain Financing Providers for merchant transaction fees and other associated loan fees.

Due to the nature of these provisions, the Company records a derivative liability ("CFP Derivative") at its fair value when the Financing Provider originates loans to customers, which reduces the amount of estimated revenue recognized on the provision of the services. The derivative liability is reduced as payments are made by Vivint Smart Home to the Financing Provider. Subsequent changes to the fair value of the derivative liability are realized through other income, net in the consolidated statements of operations. For further discussion, see Note 6, Accounting for Derivative Instruments and Hedging Activities.

Derivative Instruments

The Company accounts for derivative instruments under ASC 815, which requires the Company to record all derivatives on the balance sheet at fair value and changes in fair value in earnings, unless they qualify for the NPNS exception. The Company's primary derivative instruments are power and natural gas purchase or sales contracts, fuels purchase contracts, the CFP and other energy related commodities used to mitigate variability in earnings due to fluctuation in market prices. In order to mitigate interest rate risk associated with the issuance of the Company's variable rate debt, NRG enters into interest rate swap agreements. In addition, in order to mitigate foreign exchange risk associated with the purchase of USD denominated natural gas for the Company's Canadian business, NRG enters into foreign exchange contract agreements.

As of December 31, 2024 and 2023, the Company did not have derivative instruments that were designated as cash flow or fair value hedges.

Revenues and expenses on contracts that qualify for the NPNS exception are recognized when the underlying physical transaction is delivered. While these contracts are considered derivative instruments under ASC 815, they are not recorded at fair value, but on an accrual basis of accounting. If it is determined that a transaction designated as NPNS no longer meets the scope exception, the fair value of the related contract is recorded on the balance sheet and immediately recognized through earnings.

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

Mark-to-Market for Economic Hedging Activities

NRG enters into derivative instruments to manage price and delivery risk, optimize physical and contractual assets in the portfolio and manage working capital requirements. The mark-to-market for economic hedging activities are recognized to revenues or cost of operations during the reporting period.

Operations and Maintenance and Other Cost of Operations

Operations and maintenance costs include major and other routine preventative (planned outage) and corrective (forced outage) maintenance activities to ensure the safe and reliable operation of the Company's generation portfolio in compliance with all local, state and federal requirements. Operations and maintenance costs are also costs associated with retaining and maintaining the Company's customer base, such as call center support, portfolio maintenance and data analytics. Other cost of operations primarily includes gross receipts taxes, insurance, property taxes and asset retirement obligation expense.

Foreign Currency Translation and Transaction Gains and Losses

The local currencies are generally the functional currency of NRG's foreign operations. Foreign currency denominated assets and liabilities are translated at end-of-period rates of exchange. Revenues, expenses, and cash flows are translated at the weighted-average rates of exchange for the period. The resulting currency translation adjustments are not included in the Company's consolidated statements of operations for the period, but are accumulated and reported as a separate component of stockholders' equity until sale or complete or substantially complete liquidation of the net investment in the foreign entity takes place. Foreign currency transaction gains or losses are reported within other income, net in the Company's consolidated statements of operations. For the years ended December 31, 2024, 2023 and 2022, amounts recognized as foreign currency transaction gains/(losses) were immaterial. The Company's cumulative translation adjustment balances as of December 31, 2024, 2023, and 2022 were $(72) million, $(43) million, and $(55) million, respectively.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trust funds, accounts receivable, notes receivable, derivatives and investments in debt securities. Trust funds are held in accounts managed by experienced investment advisors. Certain accounts receivable, notes receivable, and derivative instruments are concentrated within entities engaged in the energy industry. These industry concentrations may impact the Company's overall exposure to credit risk, either positively or negatively, in that the customers may be similarly affected by changes in economic, industry or other conditions. Receivables and other contractual arrangements are subject to collateral requirements under the terms of enabling agreements. However, the Company believes that the credit risk posed by industry concentration is offset by the diversification and creditworthiness of its customer base. See Note 5, Fair Value of Financial Instruments, for a further discussion of derivative concentrations.

Asset Retirement Obligations

The Company accounts for AROs in accordance with ASC 410-20, Asset Retirement Obligations, or ASC 410-20. Retirement obligations associated with long-lived assets included within the scope of ASC 410-20 are those for which a legal obligation exists under enacted laws, statutes, and written or oral contracts, including obligations arising under the doctrine of promissory estoppel, and for which the timing and/or method of settlement may be conditional on a future event. ASC 410-20 requires an entity to recognize the fair value of a liability for an ARO in the period in which it is incurred and a reasonable estimate of fair value can be made.

Upon initial recognition of a liability for an ARO, the Company capitalizes the asset retirement cost by increasing the carrying amount of the related long-lived asset by the same amount. Over time, the liability is accreted to its future value, while the capitalized cost is depreciated over the useful life of the related asset. See Note 13, Asset Retirement Obligations, for a further discussion of AROs.

Pensions and Other Postretirement Benefits

The Company offers pension benefits through a defined benefit pension plan. In addition, the Company provides postretirement health and welfare benefits for certain groups of employees. The Company accounts for pension and other postretirement benefits in accordance with ASC 715, Compensation — Retirement Benefits, or ASC 715*.* The Company recognizes the funded status of the Company's defined benefit plans in the statement of financial position and records an offset for gains and losses as well as all prior service costs that have not been included as part of the Company's net periodic benefit cost to other comprehensive income. The determination of the Company's obligation and expenses for pension benefits is dependent on the selection of certain assumptions. These assumptions determined by management include the discount rate, the expected rate of return on plan assets and the rate of future compensation increases. The Company's actuarial consultants assist in determining assumptions for such items as retirement age. The assumptions used may differ materially from actual results, which may result in a significant impact to the amount of pension obligation or expense recorded by the Company.

The Company measures the fair value of its pension assets in accordance with ASC 820, Fair Value Measurements and Disclosures, or ASC 820. For further discussion, see Note 14, Benefit Plans and Other Postretirement Benefits.

Stock-Based Compensation

The Company accounts for its stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation, or ASC 718*.* The fair value of the Company's performance stock units is estimated on the date of grant using a Monte Carlo valuation model. NRG uses the Company's common stock price on the date of grant as the fair value of the Company's deferred stock units. Forfeiture rates are estimated based on an analysis of the Company's historical forfeitures, employment turnover, and expected future behavior. The Company recognizes compensation expense for both graded and cliff vesting awards on a straight-line basis over the requisite service period for the entire award. For further discussion, see Note 20, Stock-Based Compensation.

Investments Accounted for by the Equity Method

The Company has investments in domestic energy projects, as well as one Australian project. The equity method of accounting is applied to such investments in affiliates, which include joint ventures and partnerships, because the ownership structure prevents the Company from exercising a controlling influence over the operating and financial policies of the projects. Under this method, equity in pre-tax income or losses of domestic partnerships and, generally, in the net income or losses of its Australian project, are reflected as equity in earnings of unconsolidated affiliates. Distributions from equity method investments that represent earnings on the Company's investment are included within cash flows from operating activities and distributions from equity method investments that represent a return of the Company's investment are included within cash flows from investing activities. For further discussion, see Note 16, Investments Accounted for by the Equity Method and Variable Interest Entities.

Sale-Leaseback Arrangements

NRG is party to sale-leaseback arrangements that provide for the sale of certain assets to a third-party and simultaneously leases back the same asset to the Company. If the seller-lessee transfers control of the underlying assets to the buyer-lessor, the arrangement is accounted for under ASC 842-40, Sale-Leaseback Transactions. These arrangements are classified as operating leases on the Company's consolidated balance sheets.

Marketing and Advertising Costs

The Company expenses its marketing and advertising costs as incurred and includes them within selling, general and administrative costs. The costs of tangible assets used in advertising campaigns are recorded as fixed assets or deferred advertising costs and amortized as advertising costs over the shorter of the useful life of the asset or the advertising campaign. The Company has several long-term sponsorship arrangements. Payments related to these arrangements are deferred and expensed over the term of the arrangement. Advertising expenses for the years ended December 31, 2024, 2023, and 2022 were $215 million, $185 million, and $82 million, respectively.

Business Combinations

The Company accounts for its business combinations in accordance with ASC 805, Business Combinations, or ASC 805, which requires an acquirer to recognize and measure in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at fair value at the acquisition date. The Company also recognizes and measures the goodwill acquired or a gain from a bargain purchase in the business combination. In addition, transaction costs are expensed as incurred.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available. Estimates are used for such items as plant depreciable lives, tax provisions, uncollectible accounts, actuarially determined benefit costs, the valuation of energy commodity contracts, environmental liabilities, legal costs incurred in connection with recorded loss contingencies, and assets acquired and liabilities assumed in business combinations, among others. In addition, estimates are used to test long-lived assets and goodwill for impairment and to determine the fair value of impaired assets. As better information becomes available or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.

Reclassifications

Certain prior period amounts have been reclassified for comparative purposes. The reclassifications did not affect results from operations, net assets or cash flows.

Recent Accounting Developments - Guidance Adopted in 2024

ASU 2023-07 – In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, or ASU 2023-07. The guidance in ASU 2023-07 enhances reportable segment disclosure requirements by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit and loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The Company adopted the amendments effective December 31, 2024. Because the amendments update disclosure requirements only, it did not have an impact on the Company's results of operations, cash flows, or statement of financial position.

Recent Accounting Developments - Guidance Not Yet Adopted

ASU 2023-09 – In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, or ASU 2023-09. The guidance in ASU 2023-09 enhances income tax disclosures by requiring disclosure of specific categories in the effective tax rate reconciliation and additional information for reconciling items that meet a quantitative threshold. Further, the amendments of ASU 2023-09 require certain disclosures on income tax expense and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments of ASU 2023-09 may be applied on a prospective or retrospective basis. The Company is currently evaluating the impact of adopting ASU 2023-09 on its disclosures.

ASU 2024-03 – In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses, or ASU

2024-03. The guidance in ASU 2024-03 requires more detailed information about specified categories of expenses included in certain captions presented on the face of the income statement. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2024-03 on its disclosures.

ASU 2024-04 – In November 2024, the FASB issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20) – Induced Conversions of Convertible Debt Instruments, or ASU 2024-04. The guidance in ASU 2024-04 clarifies the requirements related to accounting for the settlement of a debt instrument as an induced conversion when changes are made to conversion features as part of an offer to settle the instrument. This ASU is effective for annual periods beginning after December 15, 2025, with early adoption permitted. The amendments may be applied either (1) prospectively to any settlements of convertible debt instruments that occur after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements, with a cumulative adjustment-effect adjustment to equity. The Company is currently evaluating the impact of adopting ASU 2024-04 on its disclosures.

Note 3 — Revenue Recognition

The Company's policies with respect to its various revenue streams are detailed below. The Company generally applies the invoicing practical expedient to recognize revenue for the revenue streams detailed below, except in circumstances where the invoiced amount does not represent the value transferred to the customer.

Retail Revenue

Gross revenues for energy sales and services to retail customers are recognized as the Company transfers the promised goods and services to the customer. Payment terms are generally 15 to 60 days. For the majority of its electricity and natural gas contracts, the Company’s performance obligation with the customer is satisfied over time and performance obligations for its electricity and natural gas products are recognized as the customer takes possession of the product. The Company also allocates the contract consideration to distinct performance obligations in a contract for which the timing of the revenue recognized is different. Additionally, customer discounts and incentives reduce the contract consideration and are recognized over the term of the contract.

Energy sales and services that have been delivered but not billed by period end are estimated. Accrued unbilled revenues are based on estimates of customer usage since the date of the last meter reading provided by the independent system operators, utilities, or electric distribution companies. Volume estimates are based on daily forecasted volumes and estimated customer usage by class. Unbilled revenues are calculated by multiplying these volume estimates by the applicable rate by customer class. Estimated amounts are adjusted when actual usage is known and billed.

As contracts for retail electricity and natural gas can be for multi-year periods, the Company has performance obligations under these contracts that have not yet been satisfied. These performance obligations have transaction prices that are both fixed and variable, and that vary based on the contract duration, customer type, inception date and other contract-specific factors. For the fixed price contracts, the amount of any unsatisfied performance obligations will vary based on customer usage, which will depend on factors such as weather and customer activity and therefore it is not practicable to estimate such amounts.

Vivint Smart Home Retail Revenue

Vivint Smart Home offers its customers combinations of smart home products and services, which together create an integrated smart home system that allows the Company's customers to monitor, control and protect their homes. As the products and services included in the customer's contract are integrated and highly interdependent, and because the products (including installation) and services must work together to deliver the monitoring, controlling and protection of their home, the Company has concluded that the products and services contracted for by the customer are generally not distinct within the context of the contract and, therefore, constitute a single, combined performance obligation. Revenues for this single, combined performance obligation are recognized on a straight-line basis over the customer's contract term, which is the period in which the parties to the contract have enforceable rights and obligations. The Company has determined that certain contracts that do not require a long-term commitment for monitoring services by the customer contain a material right to renew the contract, because the customer does not have to purchase the products upon renewal. Proceeds allocated to the material right are recognized over the expected period of benefit. The majority of Vivint Smart Home's subscription contracts are five years and are generally non-cancelable. These contracts generally convert into month-to-month agreements at the end of the initial term, while some customers are month-to-month from inception. Payment for Vivint Smart Home services is generally due in advance on a monthly basis, with payment terms up to 30 days. Product sales and other one-time fees are invoiced to customers at time of sale. Revenues for any products or services that are considered separate performance obligations are recognized upon delivery. Payments received or billed in advance are reported as deferred revenues.

Energy Revenue

Both physical and financial transactions consist of revenues billed to a third-party at either market or negotiated contract terms to optimize the financial performance of the Company's generating facilities. Payment terms vary from 5 to 55 days. Electric energy revenue is recognized upon transmission to the customer over time, using the output method for measuring progress of satisfaction of performance obligations. Physical transactions, or the sale of generated electricity to meet supply and demand, are recorded on a gross basis in the Company's consolidated statements of operations. The Company applies the invoicing practical expedient in recognizing energy revenue. Under the practical expedient, revenue is recognized based on the invoiced amount which is equal to the value to the customer of NRG’s performance obligation completed to date. Financial transactions used to hedge the sale of electricity are recorded net within revenues in the consolidated statements of operations in accordance with ASC 815.

Ancillary revenues, included in Other revenue, are recognized over time as the obligation is fulfilled, using the output method for measuring progress of satisfaction of performance obligations.

Capacity Revenue

The Company's largest sources of capacity revenues are capacity auctions in PJM and NYISO. Capacity revenues also include revenues billed to a third-party at either market or negotiated contract terms for making installed generation and demand response capacity available in order to satisfy system integrity and reliability requirements. Payment terms vary from 15 to 55 days. Capacity revenues are recognized over time, using the output method for measuring progress of satisfaction of performance obligations. The Company applies the invoicing practical expedient in recognizing capacity revenue. Under the practical expedient, revenue is recognized based on the invoiced amount which is equal to the value to the customer of NRG’s performance obligation completed to date.

Performance Obligations

As of December 31, 2024, estimated future fixed fee performance obligations are $1.6 billion, $1.2 billion, $796 million, $489 million and $219 million for the fiscal years 2025, 2026, 2027, 2028 and 2029, respectively. These performance obligations include Vivint Smart Home products and services, as well as cleared auction MWs in the PJM, ISO-NE, NYISO and MISO capacity auctions. The cleared auction MWs are subject to penalties for non-performance.

Disaggregated Revenues

The following tables represent the Company’s disaggregation of revenue from contracts with customers for the years ended December 31, 2024, 2023, and 2022:


	For the Year Ended December 31, 2024
(In millions)	Texas		East		West/Services/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue:
Home	$	6,836	$	2,453	$	1,750	$	1,932	$	(25)	$	12,946
Business	3,564		8,794		1,845		—		—		14,203
Total retail revenue(a)	10,400		11,247		3,595		1,932		(25)		27,149
Energy revenue(a)	41		242		229		—		(12)		500
Capacity revenue(a)	—		156		24		—		(3)		177
Mark-to-market for economic hedging activities(b)	—		(23)		16		—		4		(3)
Contract amortization	—		(27)		(2)		—		—		(29)
Other revenue(a)	212		112		24		—		(12)		336
Total revenue	10,653		11,707		3,886		1,932		(48)		28,130
Less: Revenues accounted for under topics other than ASC 606 and ASC 815	—		57		61		—		(1)		117
Less: Realized and unrealized ASC 815 revenue	30		168		75		—		(8)		265
Total revenue from contracts with customers	$	10,623	$	11,482	$	3,750	$	1,932	$	(39)	$	27,748
(a) The following table represents the realized revenues related to derivative instruments that are accounted for under ASC 815 and included in the amounts above:
(In millions)	Texas		East		West/Services/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue	$	—	$	36	$	—	$	—	$	—	$	36
Energy revenue	—		79		63		—		(12)		130
Capacity revenue	—		76		—		—		—		76
Other revenue	30		—		(4)		—		—		26
(b) Revenue relates entirely to unrealized gains and losses on derivative instruments accounted for under ASC 815


	For the Year Ended December 31, 2023
(In millions)	Texas		East		West/Services/Other		Vivint Smart Home(a)		Corporate/Eliminations		Total
Retail revenue:
Home	$	6,538	$	2,195	$	1,890	$	1,549	$	(1)	$	12,171
Business	3,492		9,751		2,053		—		—		15,296
Total retail revenue(b)	10,030		11,946		3,943		1,549		(1)		27,467
Energy revenue(b)	77		291		185		—		—		553
Capacity revenue(b)	—		197		2		—		(2)		197
Mark-to-market for economic hedging activities(c)	—		57		103		—		(16)		144
Contract amortization	—		(32)		—		—		—		(32)
Other revenue(b)	369		88		48		—		(11)		494
Total revenue	10,476		12,547		4,281		1,549		(30)		28,823
Less: Revenues accounted for under topics other than ASC 606 and ASC 815	—		17		35		—		—		52
Less: Realized and unrealized ASC 815 revenue	29		364		138		—		(16)		515
Total revenue from contracts with customers	$	10,447	$	12,166	$	4,108	$	1,549	$	(14)	$	28,256
(a) Includes results of operations following the acquisition date of March 10, 2023
(b) The following table represents the realized revenues related to derivative instruments that are accounted for under ASC 815 and included in the amounts above:
(In millions)	Texas		East		West/Services/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue	$	—	$	74	$	—	$	—	$	—	$	74
Energy revenue	—		162		13		—		1		176
Capacity revenue	—		73		—		—		—		73
Other revenue	29		(2)		22		—		(1)		48
(c) Revenue relates entirely to unrealized gains and losses on derivative instruments accounted for under ASC 815


	For the Year Ended December 31, 2022
(In millions)	Texas		East		West/Services/Other		Corporate/Eliminations		Total
Retail revenue:
Home	$	6,388	$	2,088	$	2,286	$	(1)	$	10,761
Business	3,229		13,768		1,964		—		18,961
Total retail revenue(a)	9,617		15,856		4,250		(1)		29,722
Energy revenue(a)	111		641		466		32		1,250
Capacity revenue(a)	—		232		40		—		272
Mark-to-market for economic hedging activities(b)	2		(30)		(56)		1		(83)
Contract amortization	—		(40)		1		—		(39)
Other revenue(a)	327		104		5		(15)		421
Total revenue	10,057		16,763		4,706		17		31,543
Less: Revenues accounted for under topics other than ASC 606 and ASC 815	—		(7)		41		1		35
Less: Realized and unrealized ASC 815 revenue	(2)		84		(93)		31		20
Total revenue from contracts with customers	$	10,059	$	16,686	$	4,758	$	(15)	$	31,488
(a) The following table represents the realized revenues related to derivative instruments that are accounted for under ASC 815 and included in the amounts above:
(In millions)	Texas		East		West/Services/Other		Corporate/Eliminations		Total
Retail revenue	$	—	$	110	$	—	$	—	$	110
Energy revenue	—		(31)		(8)		31		(8)
Capacity revenue	—		33		—		—		33
Other revenue	(4)		2		(29)		(1)		(32)
(b) Revenue relates entirely to unrealized gains and losses on derivative instruments accounted for under ASC 815

Contract Balances

The following table reflects the contract assets and liabilities included in the Company's balance sheet as of December 31, 2024 and 2023:


(In millions)	December 31, 2024		December 31, 2023
Capitalized contract costs (included in Prepayments and other current assets and Other non-current assets)	$	1,220	$	706

Accounts receivable, net - Contracts with customers	3,393		3,395
Accounts receivable, net - Accounted for under topics other than ASC 606	90		136
Accounts receivable, net - Affiliate	5		11
Total accounts receivable, net	$	3,488	$	3,542

Unbilled revenues (included within Accounts receivable, net - Contracts with customers)	$	1,548	$	1,493
Deferred revenues(a)	$	1,573	$	1,634

(a)Deferred revenues from contracts with customers as of December 31, 2024 and 2023 were approximately $1.5 billion and $1.6 billion, respectively.

The revenue recognized from contracts with customers during the years ended December 31, 2024 and 2023 relating to the deferred revenue balance at the beginning of each period was $606 million and $168 million, respectively, which increased primarily due to the acquisition of Vivint Smart Home.

The Company's capitalized contract costs consist of fulfillment costs, commission payments, broker fees and other costs that represent incremental costs of obtaining the contract with customers for which the Company expects to recover. Capitalized contract costs are amortized to depreciation and amortization on a straight-line basis over the expected period of benefit of five years.

When the Company receives consideration from the customer that is in excess of the amount due, such consideration is reclassified to deferred revenue, which represents a contract liability. Smart home products and services performance obligations are recognized over the customer's contract term, which is generally three to five years. Energy contract liabilities are generally recognized to revenue in the next period as the Company satisfies its performance obligations.

**Note 4 —**Acquisitions and Dispositions

Acquisitions

2023 Acquisition

Vivint Smart Home Acquisition

On March 10, 2023 (the "Acquisition Closing Date"), the Company completed the acquisition of Vivint Smart Home, Inc., pursuant to the Agreement and Plan of Merger, dated as of December 6, 2022, by and among the Company, Vivint Smart Home, Inc. and Jetson Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”) pursuant to which Merger Sub merged with and into Vivint Smart Home, Inc., with Vivint Smart Home, Inc. surviving the merger as a wholly-owned subsidiary of the Company. Dedicated to redefining the home experience with intelligent products and services, Vivint Smart Home brought approximately two million subscribers to NRG. Vivint Smart Home's single, expandable platform incorporates artificial intelligence and machine learning into its operating system and its vertically integrated business model includes hardware, software, sales, installation, customer service and technical support and professional monitoring, enabling superior subscriber experiences and a complete end-to-end smart home experience. The acquisition accelerated the realization of NRG's consumer-focused growth strategy and creates a leading essential home services platform fueled by market-leading brands, unparalleled insights, proprietary technologies and complementary sales channels.

NRG paid $12 per share, or approximately $2.6 billion in cash. The Company funded the acquisition using:

proceeds of $724 million from newly issued $740 million 7.000% Senior Secured First Lien Notes due 2033, net of issuance costs and discount;
proceeds of $635 million from newly issued $650 million 10.25% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, net of issuance costs;
proceeds of approximately $900 million drawn from its Revolving Credit Facility and Receivables Securitization Facilities; and
cash on hand.

Acquisition costs of $38 million and $17 million for the years ended December 31, 2023 and 2022, respectively, are included in acquisition-related transaction and integration costs in the Company's consolidated statement of operations.

The acquisition has been recorded as a business combination under ASC 805, with identifiable assets and liabilities acquired recorded at their estimated Acquisition Closing Date fair value. The total consideration of $2.623 billion includes:


	(In millions)
Vivint Smart Home, Inc. common shares outstanding as of March 10, 2023 of 216,901,639 at $12.00 per share	$	2,603
Other Vivint Smart Home, Inc. equity instruments (Cash out RSUs and PSUs, Stock Appreciation Rights, Private Placement Warrants)	6
Total Cash Consideration	$	2,609
Fair value of acquired Vivint Smart Home, Inc. equity awards attributable to pre-combination service	14
Total Consideration	$	2,623

The purchase price was allocated as follows as of December 31, 2023:


	(In millions)
Current Assets
Cash and cash equivalents	$	120
Accounts receivable, net	60
Inventory	113
Prepayments and other current assets	37
Total current assets	330
Property, plant and equipment, net	49
Other Assets
Operating lease right-of-use assets, net	35
Goodwill(a)	3,494
Intangible assets, net(b):
Customer relationships	1,740
Technology	860
Trade names	160
Sales channel contract	10
Intangible assets, net	2,770
Deferred income taxes	382
Other non-current assets	14
Total other assets	6,695
Total Assets	$	7,074

Current Liabilities
Current portion of long-term debt and finance leases	$	14
Current portion of operating lease liabilities	13
Accounts payable	109
Derivative instruments	80
Deferred revenue current	518
Accrued expenses and other current liabilities	207
Total current liabilities	941
Other Liabilities
Long-term debt and finance leases	2,572
Non-current operating lease liabilities	28
Derivative instruments	32
Deferred income taxes	18
Deferred revenue non-current	837
Other non-current liabilities	23
Total other liabilities	3,510
Total Liabilities	$	4,451

Vivint Smart Home Purchase Price	$	2,623

(a)Goodwill arising from the acquisition is attributed to the value of the platform acquired, cross-selling opportunities, subscriber growth and the synergies expected from combining the operations of Vivint Smart Home with NRG's existing businesses. None of the goodwill recorded will be deductible for tax purposes

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

Dispositions

2024 Disposition

Sale of Airtron

On September 16, 2024, the Company closed on the sale of its 100% ownership in the Airtron business unit. Proceeds of $500 million were reduced by working capital and other adjustments of $20 million, resulting in net proceeds of $480 million. The Company recorded a gain on the sale of $204 million within the West/Services/Other region of operations.

2023 Dispositions

Sale of the 44% equity interest in STP

On November 1, 2023, the Company closed on the sale of its 44% equity interest in STP to Constellation Energy Generation ("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. The Company recorded a gain on the sale of $1.2 billion within the Texas region of operations. For discussion of the litigation matter related to the transaction, see Note 22, Commitments and Contingencies.

Sale of Gregory

On October 2, 2023, the Company closed on the sale of its 100% ownership in the Gregory natural gas generating facility in Texas for $102 million. The Company recorded a gain on the sale of $82 million.

Sale of Astoria

On January 6, 2023, the Company closed on the sale of land and related generation assets from the Astoria site, within the East region of operations, for proceeds of $212 million, subject to transaction fees of $3 million and certain indemnifications, resulting in a $199 million gain.

2022 Disposition

Sale of Watson

On June 1, 2022, the Company closed on the sale of its 49% ownership in the Watson natural gas generating facility for $59 million. The Company recorded a gain on the sale of $46 million within the West/Services/Other region of operations.

Note 5 — Fair Value of Financial Instruments

For cash and cash equivalents, funds deposited by counterparties, restricted cash, accounts and other receivables, accounts payable and cash collateral paid and received in support of energy risk management activities, the carrying amount approximates fair value because of the short-term maturity of those instruments and are classified as Level 1 within the fair value hierarchy.

The estimated carrying value and fair value of the Company's long-term debt, including current portion, is as follows:


	As of December 31,
	2024				2023
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value



Convertible Senior Notes	$	232	$	509	$	575	$	739
Other long-term debt, including current portion	10,648		10,252		10,219		9,835
Total long-term debt, including current portion(a)	$	10,880	$	10,761	$	10,794	$	10,574

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

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

Fair Value Accounting under ASC 820

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

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. NRG's financial assets and liabilities utilizing Level 1 inputs include active exchange-traded securities, energy derivatives, and trust fund investments.
Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. NRG's financial assets and liabilities utilizing Level 2 inputs include fixed income securities, exchange-based derivatives, and over the counter derivatives such as swaps, options and forward contracts.
Level 3 — unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. NRG's financial assets and liabilities utilizing Level 3 inputs include infrequently-traded, non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

Recurring Fair Value Measurements

Derivative assets and liabilities, debt securities, equity securities and trust fund investments, which were comprised of various U.S. debt and equity securities, are carried at fair market value.

The following tables present assets and liabilities measured and recorded at fair value on the Company's consolidated balance sheets on a recurring basis and their level within the fair value hierarchy:


	As of December 31, 2024
	Fair Value
(In millions)	Total		Level 1		Level 2		Level 3
Investments in securities (classified within other current and non-current assets)	$	28	$	—	$	28	$	—











Derivative assets:
Interest rate contracts	9		—		9		—
Foreign exchange contracts	22		—		22		—
Commodity contracts(a)	3,368		528		2,645		195



Equity securities measured using net asset value practical expedient (classified within other non-current assets)	6
Total assets	$	3,433	$	528	$	2,704	$	195
Derivative liabilities:
Interest rate contracts	$	3	$	—	$	3	$	—
Foreign exchange contracts	1		—		1		—
Commodity contracts(a)	2,970		432		2,382		156
Consumer Financing Program	203		—		—		203
Total liabilities	$	3,177	$	432	$	2,386	$	359

(a)Excludes $997 million of derivative assets and $227 million of derivative liabilities that were elected as NPNS on October 1, 2024 and are no longer valued at fair value on a recurring basis. For further discussion, see Item 15 — Note 6, Accounting for Derivative Instruments and Hedging Activities


	As of December 31, 2023
	Fair Value
(In millions)	Total		Level 1		Level 2		Level 3
Investments in securities (classified within other current and non-current assets)	$	21	$	—	$	21	$	—










Derivative assets:
Interest rate contracts	12		—		12		—
Foreign exchange contracts	5		—		5		—
Commodity contracts	6,138		1,334		4,470		334

Equity securities measured using net asset value practical expedient (classified within other non-current assets)	6


Total assets	$	6,182	$	1,334	$	4,508	$	334
Derivative liabilities:
Interest rate contracts	$	8	$	—	$	8	$	—
Foreign exchange contracts	9		—		9		—
Commodity contracts	5,356		1,413		3,728		215
Consumer Financing Program	134		—		—		134
Total liabilities	$	5,507	$	1,413	$	3,745	$	349

The following table reconciles, for the years ended December 31, 2024 and 2023, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements using significant unobservable inputs, for commodity derivatives:


	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Commodity Derivatives (a)
	For the Year Ended December 31,
(In millions)	2024		2023
Beginning balance	$	119	$	505

Total (losses) realized/unrealized included in earnings	(113)		(164)

Purchases	42		42

Transfers into Level 3(b)	2		78
Transfers out of Level 3(b)(c)	(11)		(342)
Ending balance	$	39	$	119
(Losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of year-end	$	(55)	$	(46)

(a)Consists of derivatives assets and liabilities, net, excluding derivative liabilities from Consumer Financing Program, which are presented in a separate table below

(b)Transfers into/out of Level 3 are related to the availability of consensus pricing and external broker quotes, and are valued as of the end of the reporting period. Except for the transfers out of Level 3 noted below, all other transfers into/out of Level 3 are from/to Level 2

(c)For the year ended December 31, 2023, due to the change to use consensus pricing, there was a decrease in the number of contracts valued with prices provided by models and other valuation techniques, which resulted in a large transfer out of Level 3

Realized and unrealized gains and losses included in earnings that are related to the commodity derivatives are recorded in revenues and cost of operations.

The following table reconciles, for the years ended December 31, 2024 and 2023, the beginning and ending balances of the contractual obligations from the Consumer Financing Program that are recognized at fair value in the condensed consolidated financial statements, using significant unobservable inputs:


	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Consumer Financing Program
	For the Year Ended December 31,
(In millions)	2024		2023
Beginning balance	$	(134)	$	—
Contractual obligations added from the acquisition of Vivint Smart Home	—		(112)
New contractual obligations	(147)		(68)
Settlements	92		62
Total losses included in earnings	(14)		(16)
Ending balance	$	(203)	$	(134)

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

Derivative fair value measurements

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

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

The remainder of the assets and liabilities represents contracts for which external sources or observable market quotes are not available. These contracts are valued based on various valuation techniques including but not limited to internal models based on a fundamental analysis of the market and extrapolation of observable market data with similar characteristics. As of December 31, 2024, contracts valued with prices provided by models and other valuation techniques make up 6% of derivative assets and 11% of derivative liabilities. The fair value of each contract is discounted using a risk free interest rate. In addition, the Company applies a credit reserve to reflect credit risk, which for foreign exchange contracts and interest rate swaps is calculated utilizing the bilateral method based on published default probabilities. For commodities, to the extent that NRG's net exposure under a specific master agreement is an asset, the Company uses the counterparty's default swap rate. If the exposure under a specific master agreement is a liability, the Company uses NRG's default swap rate. For foreign exchange contracts, interest rate swaps, and commodities, the credit reserve is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume NRG's liabilities or that a market participant would be willing to pay for NRG's assets. As of December 31, 2024, the credit reserve resulted in a $1 million decrease primarily within cost of operations. As of December 31, 2023, the credit reserve resulted in $18 million decrease primarily within cost of operations.

The fair values in each category reflect the level of forward prices and volatility factors as of December 31, 2024 and may change as a result of changes in these factors. Management uses its best estimates to determine the fair value of commodity and derivative contracts NRG holds and sells. These estimates consider various factors including closing exchange, consensus and over-the-counter price quotations, time value, volatility factors and credit exposure. It is possible, however, that future market prices could vary from those used in recording assets and liabilities from energy marketing and trading activities and such variations could be material.

NRG's significant positions classified as Level 3 include physical and financial natural gas, power, capacity contracts and renewable energy certificates executed in illiquid markets as well as financial transmission rights ("FTRs"). The significant unobservable inputs used in developing fair value include illiquid natural gas and power location pricing, which is derived as a basis to liquid locations. The basis spread is based on observable market data when available or derived from historic prices and forward market prices from similar observable markets when not available. Forward capacity prices are based on market information, forecasted future electricity demand and supply, past auctions and internally developed pricing models. Renewable energy certificate prices are based on market information and internally developed pricing models. For FTRs, NRG uses the most recent auction prices to derive the fair value. The Consumer Financing Program derivatives are valued using a discounted cash flow model, with inputs consisting of available market data, such as market yield discount rates, as well as unobservable internally derived assumptions, such as collateral prepayment rates, collateral default rates and credit loss rates.

The following tables quantify the significant unobservable inputs used in developing the fair value of the Company's Level 3 positions as of December 31, 2024 and 2023:


	Significant Unobservable Inputs
	December 31, 2024
	Fair Value						Input/Range
(in millions, except as noted)	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High			Weighted Average
Natural Gas Contracts	$	56	$	15	Discounted Cash Flow	Forward Market Price ($ per MMBtu)	$	2		$	27		$	4
Power Contracts	57		86		Discounted Cash Flow	Forward Market Price ($ per MWh)	0			109			39
Capacity Contracts	34		13		Discounted Cash Flow	Forward Market Price ($ per MW/Day)	16			510			220
Renewable Energy Certificates	30		14		Discounted Cash Flow	Forward Market Price ($ per Certificate)	2			375			15
FTRs	18		28		Discounted Cash Flow	Auction Prices ($ per MWh)	(50)			16,180			0
Consumer Financing Program	—		203		Discounted Cash Flow	Collateral Default Rates	0.52		%	76.80		%	11.71		%
					Discounted Cash Flow	Collateral Prepayment Rates	2.00		%	3.00		%	2.83		%
					Discounted Cash Flow	Credit Loss Rates	6.00		%	60.00		%	14.22		%
	$	195	$	359


	Significant Unobservable Inputs
	December 31, 2023
	Fair Value						Input/Range
(in millions, except as noted)	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High			Weighted Average
Natural Gas Contracts	$	39	$	65	Discounted Cash Flow	Forward Market Price ($ per MMBtu)	$	1		$	15		$	3
Power Contracts	197		66		Discounted Cash Flow	Forward Market Price ($ per MWh)	1			210			47
Capacity Contracts	21		33		Discounted Cash Flow	Forward Market Price ($ per MW/Day)	49			658			285
Renewable Energy Certificates	58		14		Discounted Cash Flow	Forward Market Price ($ per Certificate)	2			320			15
FTRs	19		37		Discounted Cash Flow	Auction Prices ($ per MWh)	(58)			252			0
Consumer Financing Program	—		134		Discounted Cash Flow	Collateral Default Rates	0.43		%	93.30		%	8.12		%
					Discounted Cash Flow	Collateral Prepayment Rates	2.00		%	3.00		%	2.95		%
					Discounted Cash Flow	Credit Loss Rates	6.00		%	60.00		%	12.57		%
	$	334	$	349

The following table provides sensitivity of fair value measurements to increases/(decreases) in significant unobservable inputs as of December 31, 2024 and 2023:


Significant Unobservable Input	Position	Change In Input	Impact on Fair Value Measurement
Forward Market Price Natural Gas/Power/Capacity/Renewable Energy Certificates	Buy	Increase/(Decrease)	Higher/(Lower)
Forward Market Price Natural Gas/Power/Capacity/Renewable Energy Certificates	Sell	Increase/(Decrease)	Lower/(Higher)
FTR Prices	Buy	Increase/(Decrease)	Higher/(Lower)
FTR Prices	Sell	Increase/(Decrease)	Lower/(Higher)
Collateral Default Rates	n/a	Increase/(Decrease)	Higher/(Lower)
Collateral Prepayment Rates	n/a	Increase/(Decrease)	Lower/(Higher)
Credit Loss Rates	n/a	Increase/(Decrease)	Higher/(Lower)

Under the guidance of ASC 815, entities may choose to offset cash collateral posted or received against the fair value of derivative positions executed with the same counterparties under the same master netting agreements. The Company has chosen not to offset positions as defined in ASC 815. As of December 31, 2024, the Company recorded $309 million of cash collateral posted and $199 million of cash collateral received on its balance sheet.

Concentration of Credit Risk

In addition to the credit risk discussion as disclosed in Note 2, Summary of Significant Accounting Policies, the following item is a discussion of the concentration of credit risk for the Company's financial instruments. Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Company monitors and manages credit risk through credit policies that include: (i) an established credit approval process; (ii) a daily monitoring of counterparties' credit limits; (iii) the use of credit mitigation measures such as margin, collateral, prepayment arrangements, or volumetric limits; (iv) the use of payment netting agreements; and (v) the use of master netting

agreements that allow for the netting of positive and negative exposures of various contracts associated with a single counterparty. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows. The Company seeks to mitigate counterparty risk by having a diversified portfolio of counterparties. The Company also has credit protection within various agreements to call on additional collateral support if and when necessary. Cash margin is collected and held at the Company to cover the credit risk of the counterparty until positions settle.

Counterparty Credit Risk

As of December 31, 2024, counterparty credit exposure, excluding credit exposure from RTOs, ISOs, and registered commodity exchanges and certain long-term agreements, was $1.7 billion and NRG held collateral (cash and letters of credit) against those positions of $288 million, resulting in a net exposure of $1.5 billion. NRG periodically receives collateral from counterparties in excess of their exposure. Collateral amounts shown include such excess while net exposure shown excludes excess collateral received. Approximately 69% of the Company's exposure before collateral is expected to roll off by the end of 2026. Counterparty credit exposure is valued through observable market quotes and discounted at a risk free interest rate. The following tables highlight net counterparty credit exposure by industry sector and by counterparty credit quality. Net counterparty credit exposure is defined as the aggregate net asset position for NRG with counterparties where netting is permitted under the enabling agreement and includes all cash flow, mark-to-market and NPNS, and non-derivative transactions. The exposure is shown net of collateral held and includes amounts net of receivables or payables.


Category	Net Exposure (a) (b) (% of Total)
Utilities, energy merchants, marketers and other	74	%
Financial institutions	26


Total	100	%


Category	Net Exposure (a) (b) (% of Total)
Investment grade	55	%
Non-Investment grade/Non-Rated	45

Total	100	%

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

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

The Company had no exposure to wholesale counterparties in excess of 10% of the total net exposure discussed above as of December 31, 2024. Changes in hedge positions and market prices will affect credit exposure and counterparty concentration.

RTOs and ISOs

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

Exchange Traded Transactions

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

Long-Term Contracts

Counterparty credit exposure described above excludes credit risk exposure under certain long term contracts, primarily solar under Renewable PPAs. As external sources or observable market quotes are not always available to estimate such exposure, the Company values these contracts based on various techniques including, but not limited to, internal models based on a fundamental analysis of the market and extrapolation of observable market data with similar characteristics. Based on these valuation techniques, as of December 31, 2024, aggregate credit risk exposure managed by NRG to these counterparties was approximately $868 million for the next five years.

Retail Customer Credit Risk

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

As of December 31, 2024, the Company's retail customer credit exposure to Home and Business customers was diversified across many customers and various industries, as well as government entities. Current economic conditions may affect the Company's customers' ability to pay bills in a timely manner, which could increase customer delinquencies and may lead to an increase in credit losses. The Company's provision for credit losses was $314 million, $251 million, and $11 million for the years ended December 31, 2024, 2023, and 2022, respectively. During the year ended December 31, 2022, the provision for credit losses included the Company's loss mitigation efforts recognized as income of $126 million related to Winter Storm Uri.

Note 6 — Accounting for Derivative Instruments and Hedging Activities

ASC 815 requires the Company to recognize all derivative instruments on the balance sheet as either assets or liabilities and to measure them at fair value each reporting period unless they qualify for a NPNS exception. The Company may elect to designate certain derivatives as cash flow hedges, if certain conditions are met, and defer the change in fair value of the derivatives to accumulated OCI, until the hedged transactions occur and are recognized in earnings.

For derivatives that are not designated as cash flow hedges or do not qualify for hedge accounting treatment, the changes in the fair value will be immediately recognized in earnings. Certain derivative instruments may qualify for the NPNS exception and are therefore exempt from fair value accounting treatment. ASC 815 applies to NRG's energy related commodity contracts, foreign exchange contracts, interest rate swaps and Consumer Financing Program.

As the Company engages principally in the trading and marketing of its generation assets and retail operations, some of NRG's commercial activities qualify for NPNS accounting. Most of the retail load contracts either qualify for the NPNS exception or fail to meet the criteria for a derivative and the majority of the retail supply and fuels supply contracts are recorded under mark-to-market accounting. All of NRG's hedging and trading activities are subject to limits within the Company's Risk Management Policy.

On October 1, 2024, the Company elected NPNS for certain existing derivative contracts. Upon election of NPNS, the Company discontinued derivative accounting treatment and will no longer remeasure the derivative contracts at fair value each reporting period. The fair values of these derivative contracts were frozen as of October 1, 2024 and the Company is derecognizing the fair values to earnings at the same time as the contracts mature. The values of these contracts are included in Derivative instruments captions in the Consolidated Balance Sheets. Subsequent to the election date, costs associated with these contracts will be recorded when the underlying physical transaction is delivered. These derivative contracts extend through 2036.

Energy-Related Commodities

To manage the commodity price risk associated with the Company's competitive supply activities and the price risk associated with wholesale power sales from the Company's electric generation facilities and retail power and gas sales from NRG's retail operations, NRG enters into a variety of derivative and non-derivative hedging instruments, utilizing the following:

Forward contracts, which commit NRG to purchase or sell energy commodities or fuels in the future;
Futures contracts, which are exchange-traded standardized commitments to purchase or sell a commodity or financial instrument;
Swap agreements, which require payments to or from counterparties based upon the differential between two prices for a predetermined contractual, or notional, quantity;
Option contracts, which convey to the option holder the right but not the obligation to purchase or sell a commodity; and
Weather derivative products used to mitigate a portion of lost revenue due to weather.

The objectives for entering into derivative contracts designated as hedges include:

Fixing the price of a portion of anticipated power and gas purchases for the Company's retail sales;
Fixing the price for a portion of anticipated future electricity sales that provides an acceptable return on the Company's electric generation operations; and
Fixing the price of a portion of anticipated fuel purchases for the operation of the Company's power plants.

These contracts are recognized on the balance sheet at fair value and changes in the fair value of these derivative financial instruments are recognized in earnings.

As of December 31, 2024, NRG's derivative assets and liabilities consisted primarily of the following:

Forward and financial contracts for the purchase/sale of electricity and related products economically hedging NRG's generation assets' forecasted output or NRG's retail load obligations through 2034;
Forward and financial contracts for the purchase of fuel commodities relating to the forecasted usage of NRG's generation assets through 2026;
Other energy derivatives instruments extending through 2029.

Also, as of December 31, 2024, NRG had other energy-related contracts that did not meet the definition of a derivative instrument or qualified for the NPNS exception and were therefore exempt from fair value accounting treatment as follows:

Load-following forward electric sale contracts extending through 2037;
Load-following forward natural gas purchase and sale contracts extending through 2032;
Power tolling contracts through 2036;
Coal purchase contracts through 2027;
Power transmission contracts through 2030;
Natural gas transportation contracts through 2034;
Natural gas storage agreements through 2030; and
Coal transportation contracts through 2029.

Foreign Exchange Contracts

In order to mitigate foreign exchange risk primarily associated with the purchase of USD denominated natural gas for the Company's Canadian business, NRG enters into foreign exchange contract agreements through 2028.

Interest Rate Swaps

NRG is exposed to changes in interest rate through the Company's issuance of variable rate debt. To manage the Company's interest rate risk, NRG enters into interest rate swap agreements. The Company had $1.0 billion of interest rate swaps extending through 2027 to hedge the floating rate of the Vivint Term Loans and interest rate swaps with a total nominal value of $700 million extending through 2029 to hedge the floating rate of the Term Loans which were terminated in November 2024. In November 2024, in connection with the amendment of the Term Loans, the Company entered into $700 million of interest rate swaps through 2029 to hedge its floating rate.

Consumer Financing Program

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

Vivint Smart Home pays either a monthly fee based on the average daily outstanding balance of the loans, or the number of outstanding loans, depending on the Financing Provider;
Vivint Smart Home shares the liability for credit losses depending on the credit quality of the customer; and
Vivint Smart Home pays transactional fees associated with customer payment processing.

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

Volumetric Underlying Derivative Transactions

The following table summarizes the net notional volume buy/(sell) of NRG's open derivative transactions broken out by commodity, excluding those derivatives that qualified for the NPNS exception as of December 31, 2024 and 2023. Option contracts are reflected using delta volume. Delta volume equals the notional volume of an option adjusted for the probability that the option will be in-the-money at its expiration date.


		Total Volume (In millions)
Category	Units	December 31, 2024	December 31, 2023
Emissions	Short Ton	1	—
Renewables Energy Certificates	Certificates	13	12
Coal	Short Ton	10	9
Natural Gas	MMBtu	861	838

Power	MWh	91	201
Interest	Dollars	700	1,000

Foreign Exchange	Dollars	410	548
Consumer Financing Program	Dollars	1,219	1,116

Fair Value of Derivative Instruments

The following table summarizes the fair value within the derivative instrument valuation on the balance sheet:


	Fair Value
	Derivative Assets				Derivative Liabilities
(In millions)	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023






Derivatives Not Designated as Cash Flow or Fair Value Hedges:
Interest rate contracts - current	$	—	$	12	$	3	$	—
Interest rate contracts - long-term	9		—		—		8
Foreign exchange contracts - current	15		3		—		4
Foreign exchange contracts - long-term	7		2		1		5
Commodity contracts- current	2,295		3,847		2,067		3,922
Commodity contracts- long-term	1,073		2,291		903		1,434
Consumer Financing Program - current	—		—		137		93
Consumer Financing Program - long-term	—		—		66		41

Derivatives Not Designated as Cash Flow or Fair Value Hedges	$	3,399	$	6,155	$	3,177	$	5,507
Deferred gains/losses on NPNS contracts - current	376		—		90		—
Deferred gains/losses on NPNS contracts - long-term	621		—		137		—
Deferred gains/losses on NPNS contracts(a)	$	997	$	—	$	227	$	—
Total Derivatives Not Designated as Cash Flow or Fair Value Hedges	$	4,396	$	6,155	$	3,404	$	5,507

(a)Balances related to certain derivative contracts that were previously accounted for as derivative contracts following the election of the NPNS exemption and the discontinuance of derivative accounting treatment as of the election date

The Company has elected to present derivative assets and liabilities on the balance sheet on a trade-by-trade basis and does not offset amounts at the counterparty master agreement level. In addition, collateral received or paid on the Company's derivative assets or liabilities are recorded on a separate line item on the balance sheet. The following table summarizes the offsetting derivatives by counterparty master agreement level and collateral received or paid:


	Gross Amounts Not Offset in the Statement of Financial Position
(In millions)	Gross Amounts of Recognized Assets/Liabilities		Derivative Instruments		Cash Collateral (Held)/Posted		Net Amount
As of December 31, 2024
Interest rate contracts:
Derivative assets	$	9	$	(3)	$	—	$	6
Derivative liabilities	(3)		3		—		—
Total interest rate contracts	6		—		—		6
Foreign exchange contracts:
Derivative assets	$	22	$	(1)	$	—	$	21
Derivative liabilities	(1)		1		—		—
Total foreign exchange contracts	$	21	$	—	$	—	$	21
Commodity contracts:
Derivative assets	$	4,365	$	(2,992)	$	(168)	$	1,205
Derivative liabilities	(3,197)		2,992		61		(144)
Total commodity contracts	$	1,168	$	—	$	(107)	$	1,061
Consumer Financing Program:
Derivative liabilities	$	(203)	$	—	$	—	$	(203)


Total derivative instruments	$	992	$	—	$	(107)	$	885


	Gross Amounts Not Offset in the Statement of Financial Position
(In millions)	Gross Amounts of Recognized Assets/Liabilities		Derivative Instruments		Cash Collateral (Held)/Posted		Net Amount
As of December 31, 2023
Interest rate contracts:
Derivative assets	$	12	$	(8)	$	—	$	4
Derivative liabilities	(8)		8		—		—
Total interest rate contracts	4		—		—		4
Foreign exchange contracts:
Derivative assets	$	5	$	(5)	$	—	$	—
Derivative liabilities	(9)		5		—		(4)
Total foreign exchange contracts	$	(4)	$	—	$	—	$	(4)
Commodity contracts:
Derivative assets	$	6,138	$	(4,926)	$	(74)	$	1,138
Derivative liabilities	(5,356)		4,926		145		(285)
Total commodity contracts	$	782	$	—	$	71	$	853
Consumer Financing Program:
Derivative liabilities	$	(134)	$	—	$	—	$	(134)


Total derivative instruments	$	648	$	—	$	71	$	719

Impact of Derivative Instruments on the Statement of Operations

Unrealized gains and losses associated with changes in the fair value of derivative instruments that are not accounted for as cash flow hedges are reflected in current period results of operations.

The following tables summarize the pre-tax effects of economic hedges that have not been designated as cash flow hedges or fair value hedges and trading activity on the Company's statement of operations. The effect of foreign exchange and commodity hedges is included within revenues and cost of operations. The effect of the interest rate contracts is included within interest expense. The effect of the Consumer Financing Program is included in other income, net.


	Year Ended December 31,
(In millions)	2024		2023		2022
Unrealized mark-to-market results
Reversal of previously recognized unrealized losses/(gains) on settled positions related to economic hedges(a)	$	106	$	(1,734)	$	(1,232)
Reversal of acquired loss positions related to economic hedges	5		20		2
Net unrealized gains/(losses) on open positions related to economic hedges	95		(1,149)		2,478
Total unrealized mark-to-market gains/(losses) for economic hedging activities	206		(2,863)		1,248
Reversal of previously recognized unrealized (gains)/losses on settled positions related to trading activity	(1)		13		13


Net unrealized gains/(losses) on open positions related to trading activity	2		25		(17)
Total unrealized mark-to-market gains/(losses) for trading activity	1		38		(4)
Total unrealized gains/(losses) - commodities and foreign exchange	$	207	$	(2,825)	$	1,244

(a) December 31, 2024 balance includes $37 million related to derivative contracts that were elected as NPNS on October 1, 2024 and are no longer valued at fair value on a recurring basis


	Year Ended December 31,
(In millions)	2024		2023		2022
Total impact to statement of operations - interest rate contracts	$	3	$	4	$	—
Unrealized (losses)/gains included in revenues - commodities	$	(2)	$	182	$	(87)
Unrealized gains/(losses) included in cost of operations - commodities	186		(2,988)		1,315
Unrealized gains/(losses) included in cost of operations - foreign exchange	23		(19)		16
Total impact to statement of operations - commodities and foreign exchange	$	207	$	(2,825)	$	1,244
Total impact to statement of operations - Consumer Financing Program	$	(14)	$	(16)	$	—

The reversals of acquired loss/(gain) positions were valued based upon the forward prices on the acquisition date. The roll-off amounts were offset by realized gains or losses at the settled prices and are reflected in revenue or cost of operations during the same period.

The gains from open economic hedge positions of $95 million for the year ended December 31, 2024 was primarily the result of an increase in the value of forward positions as a result of increases in natural gas and power prices in the East.

The loss from open economic hedge positions of $1.1 billion for the year ended December 31, 2023 was primarily the result of a decrease in the value of forward positions as a result of decreases in natural gas and power prices in the East and West.

The gains from open economic hedge positions of $2.5 billion for the year ended December 31, 2022 was primarily the result of an increase in the value of forward positions as a result of increases in natural gas and power prices.

Credit Risk Related Contingent Features

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 net liability positions as of December 31, 2024 was $589 million. 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 $54 million as of December 31, 2024. In the event of a downgrade in the Company's credit rating and if called for by the counterparty, $10 million of additional collateral would be required for all contracts with credit rating contingent features as of December 31, 2024.

See Note 5, Fair Value of Financial Instruments, for discussion regarding concentration of credit risk.

Note 7 — Inventory

Inventory consisted of:


	As of December 31,
(In millions)	2024		2023
Coal	$	194	$	178
Natural gas	126		189
Fuel oil	8		8
Finished goods	79		164
Spare parts	71		68

Total Inventory	$	478	$	607

Note 8 — Property, Plant and Equipment

The Company's major classes of property, plant, and equipment were as follows:


	As of December 31,				Depreciable
(In millions)	2024		2023		Lives
Facilities and equipment	$	1,972	$	1,918	1-40 years
Land and improvements	255		256

Software	582		471		5 years
Hardware and office equipment and furnishings	278		261		2-10 years
Construction in progress	442		152
Total property, plant, and equipment	3,529		3,058
Accumulated depreciation	(1,508)		(1,295)
Net property, plant, and equipment	$	2,021	$	1,763

Depreciation expense of property, plant and equipment recorded during the years ended December 31, 2024, 2023 and 2022 was $271 million, $257 million and $291 million, respectively.

Note 9 — Leases

The Company leases generating facilities, land, office and equipment, railcars, fleet vehicles and storefront space at retail stores. Operating leases with an initial term greater than twelve months are recognized as right-of-use assets and lease liabilities in the consolidated balance sheets. The Company made an accounting policy election, as permitted by ASC 842, for all asset classes not to recognize right-of-use assets and lease liabilities in the consolidated balance sheets for its short-term leases, which are leases that have a lease term of twelve months or less. For the initial measurement of lease liabilities, the discount rate that the Company uses is either the rate implicit in the lease, if known, or its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, over a similar term an amount equal to the payments for the lease. The Company recognizes lease expense for all operating leases on a straight-line basis over the lease term. In the future, should another systematic basis become more representative of the pattern in which the lessee expects to consume the remaining economic benefit of the right-of-use asset, the Company will use that basis for lease expense.

The Company considers a contract to be or to contain a lease when both of the following conditions apply: 1) an asset is either explicitly or implicitly identified in the contract and 2) the contract conveys to the Company the right to control the use of the identified asset for a period of time. The Company has the right to control the use of the identified asset when the Company has both the right to obtain substantially all the economic benefits from the use of the identified asset and the right to direct how and for what purpose the identified asset is used throughout the period of use.

Lease payments are typically fixed and payable on a monthly, quarterly, semi-annual or annual basis. Lease payments under certain agreements may escalate over the lease term either by a fixed percentage or a fixed dollar amount. Certain leases

may provide for variable lease payments in the form of payments based on unit availability, usage, a percentage of sales from the location under lease, or index-based (e.g., the U.S. Consumer Price Index) adjustments to lease payments. The Company has no leases which contain residual value guarantees provided by the Company as a lessee.

Lease Cost:


	For the Year Ended December 31,
(In millions)	2024		2023		2022
Finance lease cost	$	9	$	8	$	4
Amortization of right-of-use assets	8		7		4
Interest on lease liabilities	1		1		—
Operating lease cost	89		93		85
Short-term lease cost	32		42		7
Variable lease cost	91		91		86
Sublease income	—		(2)		(2)
Total lease cost	$	221	$	232	$	180

Other information:


	For the Year Ended December 31,
(In millions)	2024		2023		2022

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	190	$	195	$	183

Financing cash flows from finance leases	8		7		5
Right-of-use assets obtained in exchange for new finance lease liabilities	13		17		3
Right-of-use assets obtained in exchange for new operating lease liabilities	69		52		28

Lease Term and Discount Rate for leases:


	December 31, 2024		December 31, 2023
Finance leases:
Weighted average remaining lease term (in years)	2.7		2.9
Weighted average discount rate	6.26	%	4.87	%

Operating leases:
Weighted average remaining lease term (in years)	5.4		3.6
Weighted average discount rate	6.23	%	6.00	%

As of December 31, 2024, annual payments based on the maturities of the Company's operating leases are expected to be as follows:


	In millions
2025	$	85
2026	40
2027	35
2028	27
2029	18
Thereafter	87
Total undiscounted lease payments	$	292
Less: present value adjustment	(109)
Total discounted lease payments	$	183

Note 10 — Asset Impairments

2024 Impairment Losses

During the fourth quarter of 2024, the Company completed its annual budget and analyzed the corresponding impact on estimated cash flows associated with its long-lived assets. The fair value of the assets was determined using an income approach by applying a discounted cash flow methodology to the long-term budget for each facility. The income approach utilized estimates of after-tax cash flows, which were Level 3 fair value measurements, and included key inputs such as forecasted power prices, fuel costs, operating and maintenance costs, plant investment capital expenditures and discount rates.

As a result of the evaluation performed, the Company recorded impairment losses of $7 million and $14 million related to its equity method investments in Gladstone and property plant and equipment and leases in the West/Services/Other segment, respectively. For further discussion of the Gladstone investment, see Note 16, Investments Accounted for by the Equity Method and Variable Interest Entities.

Other Impairments — The Company recorded impairment losses related to excess SO2 allowances of $7 million in the Texas segment and goodwill impairment losses of $15 million in the West/Services/Other segment.

2023 Impairment Losses

During the fourth quarter of 2023, the Company completed its annual budget and analyzed the corresponding impact on estimated cash flows associated with its long-lived assets. The fair value of the assets was determined using an income approach by applying a discounted cash flow methodology to the long-term budget for each facility. The income approach utilized estimates of after-tax cash flows, which were Level 3 fair value measurements, and included key inputs such as forecasted power prices, fuel costs, operating and maintenance costs, plant investment capital expenditures and discount rates.

Gladstone — The Company recorded impairment losses of $102 million on its equity method investment in Gladstone within the West/Services/Other segment as a result of changes in the long-term outlook of the Gladstone facility, prompted by evolving energy policy conditions in Australia and an assessment of the long-term operational landscape of the facility, which concluded with the annual budget process. For further discussion of the Gladstone investment, see Note 16, Investments Accounted for by the Equity Method and Variable Interest Entities.

Other Impairments — The Company additionally recorded impairment losses related to property plant and equipment and leases of $2 million, $4 million and $20 million in the Texas, East and West/Services/Other segments, respectively.

2022 Impairment Losses

Astoria Redevelopment Impairment — During the third quarter of 2022, the Company entered into a purchase and sale agreement for the sale of the land and related assets at the Astoria generating site and the planned withdrawal and cancellation of its proposed Astoria redevelopment project. As a result, the Company impaired $43 million of Astoria project spend in the East segment. For further discussion of the transaction, see Note 4, Acquisitions and Dispositions.

PJM Asset Impairments — During the second quarter of 2022, the results of the PJM Base Residual Auction for the 2023/2024 delivery year were released leading the Company to revise its long-term view of certain facilities and announce the planned retirement of the Joliet generating facility. The Company considered the near-term retirement date of Joliet and the decline in PJM capacity prices to be a trigger for impairment and performed impairment tests on the PJM generating assets and the goodwill associated with Midwest Generation. The Company measured the impairment losses on the PJM generating assets and Midwest Generation goodwill as the difference between the carrying amount and the fair value of the PJM generating assets and Midwest Generation reporting unit, respectively. Fair values were determined using an income approach in which the Company applied a discounted cash flow methodology to the long-term budgets for the plants and reporting unit. Significant inputs impacting the income approach include the Company's long-term view of capacity and fuel prices, projected generation, the physical and economic characteristics of each plant and the reporting unit as a whole, and the discount rate applied to the after-tax cash flow projections. Impairment losses of $20 million and $130 million were recorded in the East segment on the PJM generating assets and Midwest Generation goodwill, respectively.

Other Impairments — The Company additionally recorded impairment losses of $13 million in the East segment.

Note 11 — Goodwill and Other Intangibles

Goodwill

The following table presents the changes in goodwill for the years ended December 31, 2024 and 2023 based on the Company's reportable segments:


(in millions)	Texas		East		West/Services/Other		Vivint Smart Home		Total
Balance as of January 1, 2023	$	710	$	723	$	217	$	—	$	1,650
Goodwill resulted from the acquisition of Vivint	—		—		—		3,494		3,494

Asset sales	(67)		(2)		—		—		(69)
Foreign currency translation adjustments	—		—		4		—		4
Balance as of December 31, 2023	$	643	$	721	$	221	$	3,494	$	5,079
Impairment	—		—		(15)		—		(15)
Sale of Airtron	—		—		(43)		—		(43)
Foreign currency translation adjustments	—		—		(10)		—		(10)
Balance as of December 31, 2024	$	643	$	721	$	153	$	3,494	$	5,011

Intangible Assets

The Company's intangible assets as of December 31, 2024, primarily reflect intangible assets established with the acquisitions of various companies, including Vivint Smart Home, Direct Energy, other retail acquisitions and Texas Genco. Intangible assets are comprised of the following:

*•*Emission Allowances — These intangibles primarily consist of SO2 emission allowances, including those established with the 2006 acquisition of Texas Genco, RGGI emission credits and California carbon allowances. These emission allowances are held-for-use and are amortized to cost of operations based on units of production.

Customer and supply contracts — These intangibles include the fair value at the acquisition date of in-market and out-of-market customer and supply contracts from the acquisition of Direct Energy and are amortized to revenue and cost of operations, respectively, based upon the fair market value, as of the acquisition date, for each delivery month.
Customer relationships — These intangibles represent the fair value at the acquisition date of acquired businesses' customer base from the acquisition of Vivint, Direct Energy and other acquisitions. Customer relationships are amortized to depreciation and amortization expense based on the expected discounted future net cash flows by year.
Marketing partnerships — These intangibles represent the fair value at the acquisition date of existing agreements with marketing vendors and loyalty and affinity partners for customer acquisition. Marketing partnerships are amortized to depreciation and amortization expense based on the expected discounted future net cash flows by year.
Technology — These intangibles represent the fair value at the acquisition date of developed technology for Vivint Smart Home integrated software and products. Technology is amortized to depreciation and amortization expense, ratably based on the expected discounted future net cash flows by year.
Trade names — These intangibles are amortized to depreciation and amortization expense on a straight-line basis.
Other — These intangibles primarily include renewable energy certificates. RECs are retired, as required, for the applicable compliance period. RECs are expensed to cost of operations based on NRG’s customer usage. Other also included in-market nuclear fuel contracts established from the Texas Genco acquisition in 2006 which were amortized to cost of operations over expected volumes over the life of each contract, costs to extend the operating license for STP Units 1 and 2 and intellectual property related to Goal Zero, which was amortized to depreciation and amortization expense.

The following tables summarize the components of NRG's intangible assets:


(In millions)
Year Ended December 31, 2024	Emission Allowances		Customer and Supply Contracts		Customer Relationships		Marketing Partnerships		Technology		Trade Names		Other(a)		Total
January 1, 2024	$	628	$	609	$	3,464	$	295	$	860	$	841	$	224	$	6,921
Purchases	22		—		—		—		—		—		497		519
Acquisition of businesses(b)	—		—		35		—		—		—		—		35
Usage/Sales/Retirements/Transfers	(19)		—		—		—		—		—		(461)		(480)
Write-off of fully amortized balances	—		—		(146)		—		—		(11)		—		(157)
Sale of Airtron(c)	—		—		(255)		—		—		(24)		—		(279)
Other	(6)		(3)		(5)		(1)		1		(5)		—		(19)
December 31, 2024	625		606		3,093		294		861		801		260		6,540
Less accumulated amortization	(538)		(399)		(1,555)		(193)		(457)		(443)		(47)		(3,632)
Net carrying amount	$	87	$	207	$	1,538	$	101	$	404	$	358	$	213	$	2,908

(a)RECs are not subject to amortization and had a carrying value of $213 million

(b)The weighted average amortization period for total amortizable intangible assets is approximately 5 years

(c)Includes $81 million of intangibles that were amortized


(In millions)
Year Ended December 31, 2023	Emission Allowances		Customer and Supply Contracts		Customer Relationships		Marketing Partnerships		Technology		Trade Names		Other(a)		Total
January 1, 2023	$	624	$	635	$	1,730	$	284	$	—	$	679	$	292	$	4,244
Purchases	10		—		—		—		—		—		465		475
Acquisition of businesses(b)	—		—		1,773		10		860		160		—		2,803
Usage/Sales/Retirements	—		—		—		—		—		—		(474)		(474)
Write-off of fully amortized balances	(1)		(28)		(43)		—		—		—		—		(72)
Sale of STP(c)	—		—		—		—		—		—		(59)		(59)

Other	(5)		2		4		1		—		2		—		4
December 31, 2023	628		609		3,464		295		860		841		224		6,921
Less accumulated amortization	(533)		(328)		(1,300)		(170)		(230)		(401)		(32)		(2,994)
Net carrying amount	$	95	$	281	$	2,164	$	125	$	630	$	440	$	192	$	3,927

(a)RECs are not subject to amortization and had a carrying value of $177 million

(b)The weighted average amortization period for total amortizable intangible assets is approximately 10 years

(c)Includes $47 million of intangibles that were amortized

The following table presents NRG's amortization of intangible assets for each of the past three years:


	Years Ended December 31,
(In millions)	2024		2023		2022
Emission allowances	$	5	$	6	$	6
Customer and supply contracts	71		121		141
Customer relationships	476		556		269
Marketing partnerships	23		24		23
Technology	227		230		—
Trade names	59		60		47
Other(a)	15		4		4
Total amortization	$	876	$	1,001	$	490

(a)For the year ended December 31, 2024, 2023 and 2022, other intangibles amortized to depreciation and amortization expense were $15 million, de minimis and $4 million, respectively

The following table presents estimated amortization of NRG's intangible assets as of December 31, 2024 for each of the next five years:


(In millions)
Year Ended December 31,	Emission Allowances		Customer and Supply Contracts		Customer Relationships		Marketing Partnerships		Technology		Trade Names		Total
2025	$	15	$	50	$	361	$	23	$	176	$	45	$	670
2026	16		52		289		23		130		37		547
2027	19		30		220		23		89		37		418
2028	20		12		177		15		9		37		270
2029	12		13		137		5		—		37		204

Note 12 — Long-term Debt and Finance Leases

Long-term debt and finance leases consisted of the following:


	As of December 31,
(In millions, except rates)	2024		2023		Interest rate %
Recourse debt:
Senior Notes, due 2027	$	—	$	375	6.625
Senior Notes, due 2028	821		821		5.750
Senior Notes, due 2029	733		733		5.250
Senior Notes, due 2029	500		500		3.375
Senior Notes, due 2029	798		—		5.750
Senior Notes, due 2031	1,030		1,030		3.625
Senior Notes, due 2032	480		480		3.875
Senior Notes, due 2033	925		—		6.000
Senior Notes, due 2034	950		—		6.250
Convertible Senior Notes, due 2048(a)	232		575		2.750
Senior Secured First Lien Notes, due 2024	—		600		3.750
Senior Secured First Lien Notes, due 2025	500		500		2.000
Senior Secured First Lien Notes, due 2027	900		900		2.450
Senior Secured First Lien Notes, due 2029	500		500		4.450
Senior Secured First Lien Notes, due 2033	740		740		7.000

Term Loan B, due 2031	1,317		—		SOFR + 1.750
Tax-exempt bonds	466		466		1.250 - 4.750
Subtotal recourse debt	10,892		8,220
Non-recourse debt:
Vivint Senior Notes, due 2029	—		800		5.750
Vivint Senior Secured Notes, due 2027	—		600		6.750
Vivint Senior Secured Term Loan, due 2028	—		1,320		SOFR + 3.510
Subtotal all Vivint non-recourse debt	—		2,720
Subtotal long-term debt (including current maturities)	10,892		10,940
Finance leases	14		19		various
Subtotal long-term debt and finance leases (including current maturities)	10,906		10,959
Less current maturities	(996)		(620)
Less debt issuance costs	(86)		(60)
Discounts	(12)		(146)
Total long-term debt and finance leases	$	9,812	$	10,133

(a)As of the ex-dividend date of February 3, 2025, the Convertible Senior Notes were convertible at a price of $40.78, which is equivalent to a conversion rate of approximately 24.5222 shares of common stock per $1,000 principal amount of Convertible Senior Notes

Debt includes the following discounts:


	As of December 31,
(In millions)	2024		2023
Senior Secured First Lien Notes, due 2025, 2027, 2029 and 2033	$	(10)	$	(10)
Term Loan B, due 2031	(2)		—
Vivint Senior Notes, due 2029	—		(103)
Vivint Senior Secured Notes, due 2027	—		(12)
Vivint Senior Secured Term Loan, due 2028	—		(21)
Total discounts	$	(12)	$	(146)

Consolidated Annual Maturities

As of December 31, 2024, annual payments based on the maturities of NRG’s debt and finance leases are expected to be as follows:


	(In millions)
2025	$	996
2026	18
2027	916
2028	894
2029	2,544
Thereafter	5,538
Total	$	10,906

Recourse Debt

Senior Notes

Issuance of 2029 Senior Notes, 2033 Senior Notes and 2034 Senior Notes

On October 30, 2024, the Company issued $1.9 billion in aggregate principal amount of senior unsecured notes, consisting of (i) $925 million aggregate principal amount of 6.000% senior unsecured notes due 2033 (the “2033 Notes”) and (ii) $950 million aggregate principal amount of 6.250% senior unsecured notes due 2034 (the “2034 Notes” and, together with the 2033 Notes, the “Notes”). In addition, on October 30, 2024, the Company issued $798 million aggregate principal amount of 5.750% senior unsecured notes due 2029 (the “New NRG 5.750% Senior Notes due 2029”) in connection with the Company’s previously announced offer to exchange. The Notes and the New NRG 5.750% Senior Notes due 2029 are senior unsecured obligations of the Company and are guaranteed by certain of its subsidiaries that guarantee indebtedness under the Senior Credit Facility. Interest on the New NRG 5.750% Senior Notes due 2029 is paid semi-annually beginning on January 15, 2025 until the maturity date of July 15, 2029. Interest on the 2033 Notes is paid semi-annually beginning on February 1, 2025 until the maturity date of February 1, 2033. Interest on the 2034 Notes is paid semi-annually beginning on May 1, 2025 until the maturity date of November 1, 2034.

On October 30, 2024, the Company used the net proceeds from the offering of the Notes, together with the net proceeds of its new incremental term loan B in an aggregate principal amount of $450 million, to pay the cash tender price for any and all of APX Group, Inc.’s 6.750% Senior Secured Notes due 2027 and to repay APX Group, Inc.’s secured term loans in an outstanding aggregate principal amount of approximately $1.3 billion under its senior secured credit agreement. In addition, on October 31, 2024, the Company used the net proceeds from the offering of the Notes and cash on hand to redeem all of its outstanding 6.625% Senior Notes due 2027, of which $375 million aggregate principal amount was outstanding. Any remaining net proceeds from the offering was used to pay the transaction fees, expenses and premiums, to refinance outstanding debt and for general corporate purposes.

Senior Note Redemptions

During the year ended December 31, 2024, the Company redeemed $375 million in aggregate principal amount of its 6.625% Senior Notes due 2027, at a redemption price equal to 100.000% for $382 million, which included the payment of $7 million of accrued interest, using the net proceeds from the offering of the Notes and cash on hand. In connection with the redemption, the Company wrote-off $1 million of previously deferred financing costs and other fees, which was recorded to loss on debt extinguishment.

3.750% Senior Secured First Lien Note due 2024 Repayment

On June 17, 2024, the Company repaid $600 million in aggregate principal amount of its 3.750% Senior Secured First Lien Notes due 2024.

Senior Credit Facility

Term Loan B Incurrence

On April 16, 2024, the Company, as borrower, and certain of its subsidiaries, as guarantors, entered into the Eighth Amendment to the Credit Agreement in order to (i) establish the Existing Term Loan B Facility with borrowings of $875 million in aggregate principal amount and the Existing Term Loans and (ii) make certain other modifications to the Credit Agreement as set forth therein. The proceeds from the Existing Term Loans were used to repay a portion of the Company’s Convertible Senior Notes, all of the Company’s 3.750% senior secured first lien notes due 2024 and for general corporate purposes.

On October 30, 2024, the Company, as borrower, and certain of its subsidiaries, as guarantors, entered into the Eleventh Amendment to the Credit Agreement in order to include the Incremental Term Loan B Facility in an aggregate principal amount of $450 million and the Incremental Term Loans, which Incremental Term Loan B Facility is fungible for U.S. federal tax purposes with the Existing Term Loan B Facility. The proceeds from the Incremental Term Loans, together with the proceeds of the Notes, were used to repay all loans and other amounts outstanding under APX’s senior secured credit agreement and to pay the cash tender price for any and all of APX Group, Inc.’s 6.750% Senior Secured Notes due 2027. The terms of the Incremental Term Loan B Facility (including pricing) are identical to those applicable to the Existing Term Loan B Facility, and the Incremental Term Loans constitute the same class of term loans as the Company’s Existing Term Loans.

On November 26, 2024, the Company, as borrower, entered into the Twelfth Amendment to the Credit Agreement in order to (i) reprice both the Existing Term Loan B Facility and the Incremental Term Loan B Facility and (ii) make certain other modifications to the Credit Agreement as set forth therein.

Following the effectiveness of the Twelfth Amendment, at the Company’s election, the Existing Term Loans and the Incremental Term Loans bear interest at a rate per annum equal to either (1) a fluctuating rate equal to the highest of (A) the rate published by the Federal Reserve Bank of New York in effect on such day, plus 0.50%, (B) the rate of interest per annum publicly announced from time to time by The Wall Street Journal as the “Prime Rate” in the United States, and (C) a rate of one-month Term SOFR (as defined in the Credit Agreement) (after giving effect to any floor applicable to Term SOFR) plus 1.00%, in each case, plus a margin of 0.75% or (2) Term SOFR (as defined in the Credit Agreement) (which shall not be less than 0.00%) for a one-, three- or six-month interest period (or such other period as agreed to by the Agent and the lenders, as selected by the Company), plus a margin of 1.75%.

The Existing Term Loan B Facility and the Incremental Term Loan B Facility are guaranteed by each of the Company’s subsidiaries that guarantee the Company’s Revolving Credit Facility and are secured on a first lien basis by substantially all of the Company’s and such subsidiaries’ assets, in each case, subject to certain customary exceptions and limitations set forth in the Credit Agreement.

The Existing Term Loans and the Incremental Term Loans have a final maturity date of April 16, 2031 and amortize at a rate of 1% per annum in equal quarterly installments (subject to any adjustments to such amortization payments to ensure that such Incremental Term Loans are fungible for U.S. federal tax purposes with the Existing Term Loans). If an event of default occurs under the Existing Term Loan B Facility or the Incremental Term Loan B Facility, the entire principal amount outstanding thereunder, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable, subject, in certain instances, to the expiration of applicable cure periods. The Existing Term Loan B Facility and the Incremental Term Loan B Facility also provide for customary asset sale mandatory prepayments, reporting covenants and negative covenants governing dividends, investments, indebtedness, and other matters that are customary for similar term loan B facilities.

On December 20, 2024, the Company, as borrower, entered into the Thirteenth Amendment to the Credit Agreement to (i) add APX Group, Inc. as an additional borrower of the loans under the Credit Agreement on a joint and several basis with the Company and (ii) make certain other modifications to the Credit Agreement as set forth therein.

Revolving Credit Facility

On April 22, 2024, the Company, as borrower, and certain of its subsidiaries, as guarantors, entered into the Ninth Amendment to extend the maturity date of a portion of the revolving commitments thereunder to February 14, 2028.

On October 30, 2024, the Company, as borrower, and certain of its subsidiaries, as guarantors, entered into the Tenth Amendment to (i) extend the maturity date of its revolving credit facility to October 30, 2029 and (ii) make certain other amendments to the Credit Agreement as set forth therein.

As of December 31, 2024, there were no outstanding borrowings and there were $477 million in letters of credit issued under the Revolving Credit Facility.

2048 Convertible Senior Notes

Accounting for Convertible Senior Notes — Beginning in 2022, the Company no longer records the conversion feature of its convertible senior notes in equity. Instead, the Company combined the previously separated equity component with the liability component, which together is now classified as debt, thereby eliminating the subsequent amortization of the debt discount as interest expense.

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

Convertible Senior Notes Features — As of December 31, 2024, the Convertible Senior Notes are convertible, under certain circumstances, into cash or a combination of cash and the Company’s common stock at a price of $40.94 per common share, which is the equivalent to a conversion rate of approximately 24.4241 shares of common stock per $1,000 principal amount of Convertible Senior Notes. As of December 31, 2023, the Convertible Senior Notes were convertible at a price of $41.83 per common share, which is equivalent to a conversion rate of approximately 23.9079 shares of common stock per $1,000 principal amount of Convertible Senior Notes. The settlement method is at the Company’s election. The net carrying amounts of the Convertible Senior Notes as of December 31, 2024 and December 31, 2023 were $231 million and $572 million, respectively. The Convertible Senior Notes mature on June 1, 2048, unless earlier repurchased, redeemed or converted in accordance with their terms.

The Convertible Senior Notes are convertible at the option of the holders only upon the occurrence of certain events and during certain periods, including, among others, during any calendar quarter (and only during such calendar quarter) if the last reported sales price per share of the Company’s common stock exceeded 130% of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter (the “Common Stock Sale Price Condition”). As of January 1, 2025, the Company’s Convertible Senior Notes are convertible during the quarterly period ending March 31, 2025 due to the satisfaction of the Common Stock Sale Price Condition. In addition, the Convertible Senior Notes are also convertible during specified periods as follows:

from December 1, 2024 until the close of business on the second scheduled trading day immediately before June 1, 2025; and
from December 1, 2047 until the close of business on the second scheduled trading day immediately before the maturity date.

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

The following table details the interest expense recorded in connection with the Convertible Senior Notes:


	For the years ended December 31,
(In millions, except percentages)	2024			2023			2022
Contractual interest expense	$	9		$	16		$	16
Amortization of discount and deferred finance costs	1			2			1
Total	$	10		$	18		$	17

Effective Interest Rate	3.08		%	3.18		%	3.01		%

Convertible Senior Notes Repurchases

During the year ended December 31, 2024, the Company completed repurchases of a portion of the Convertible Senior Notes using cash on hand and a portion of the proceeds from the Term Loans, as detailed in the table below. For the year ended December 31, 2024, a $260 million loss on debt extinguishment was recorded in connection with the repurchases below.


(In millions, except percentages)
Settlement Period	Principal Repurchased		Cash Paid(a)		Average Repurchase Percentage
March 2024	$	92	$	151	162.356%
April 2024	251		452		179.454%
Total Repurchases	$	343	$	603

(a)Includes accrued interest of $1 million and $2 million for the March and April repurchases, respectively

Capped Call Options

During the second quarter of 2024, the Company entered into privately negotiated capped call transactions with certain counterparties (the “Capped Calls”) to effectively lock in a conversion premium of $257 million on the remaining $232 million in aggregate principal amount of the Convertible Senior Notes. The option price of $257 million was incurred when the Company entered into the Capped Calls, which will be payable upon the earlier of settlement and expiration of the applicable Capped Calls. For further discussion see Note 15, Capital Structure.

Senior Notes Early Redemption

As of December 31, 2024, the Company had the following outstanding issuances of senior notes with an early redemption feature, or Senior Notes:

i.5.750% senior notes, issued December 7, 2017 and due January 15, 2028, or the 2028 Senior Notes;

ii.5.250% senior notes, issued May 24, 2019 and due June 15, 2029, or the 5.250% 2029 Senior Notes;

iii.3.375% senior notes, issued December 2, 2020 and due February 15, 2029, or the 3.375% 2029 Senior Notes;

iv.5.750% senior notes, issued October 30, 2024 and due July 15, 2029, or the 5.750% 2029 Senior Notes;

v.3.625% senior notes, issued December 2, 2020 and due February 15, 2031, or the 2031 Senior Notes;

vi.3.875% senior notes, issued August 23, 2021 and due February 15, 2032, or the 2032 Senior Notes;

vii.6.000% senior notes, issued October 30, 2024 and due February 1, 2033, or the 2033 Senior Notes; and

viii.6.250% senior notes, issued October 30, 2024 and due November 1, 2034, or the 2034 Senior Notes.

The indentures and the forms of notes provide, among other things, that the Senior Notes will be senior unsecured obligations of the Company. The indentures also provide for customary events of default, which include, among others: nonpayment of principal or interest; breach of other covenants in the indentures; defaults in failure to pay certain other indebtedness; the rendering of judgments to pay certain amounts of money against the Company and certain of its subsidiaries; the failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and continues, the trustee or the holders of at least 25% or 30% (depending on the series of Senior Notes) in principal amount of the then-outstanding series of Senior Notes may declare all of the Senior Notes of such series to be due and payable immediately. The terms of the indentures contain certain restrictions on incurring secured debt and consolidating, merging or transferring all or substantially all of the Company’s assets. Interest is payable semi-annually on the Senior Notes until their maturity dates.

2028 Senior Notes

The Company may redeem some or all of the 2028 Senior Notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed up to the redemption date:


Redemption Period	Redemption Percentage
January 15, 2025 to January 14, 2026	100.958	%
January 15, 2026 and thereafter	100.000	%

5.250% 2029 Senior Notes

The Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed up to the redemption date:


Redemption Period	Redemption Percentage
June 15, 2024 to June 14, 2025	102.625	%
June 15, 2025 to June 14, 2026	101.750	%
June 15, 2026 to June 14, 2027	100.875	%
June 15, 2027 and thereafter	100.000	%

3.375% 2029 Senior Notes


Redemption Period	Redemption Percentage
February 15, 2025 to February 14, 2026	100.844	%
February 15, 2026 and thereafter	100.000	%

5.750% 2029 Senior Notes


Redemption Period	Redemption Percentage
July 15, 2024 to July 14, 2025	102.875	%
July 15, 2025 to July 14, 2026	101.438	%
July 15, 2026 and thereafter	100.000	%

2031 Senior Notes

At any time prior to February 15, 2026, the Company may redeem all or a part of the 2031 Senior Notes, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the note; or (ii) the excess of the present value of 101.813% of the note, plus interest payments due on the note through February 15, 2026 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50% over the principal amount of the note. In addition, on or after February 15, 2026, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed up to the redemption date:


Redemption Period	Redemption Percentage
February 15, 2026 to February 14, 2027	101.813	%
February 15, 2027 to February 14, 2028	101.208	%
February 15, 2028 to February 14, 2029	100.604	%
February 15, 2029 and thereafter	100.000	%

2032 Senior Notes

At any time prior to February 15, 2027, the Company may redeem all or a part of the 2032 Senior Notes, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the notes; or (ii) the excess of (A) the present value of (1) the redemption price of the note at February 15, 2027 (such redemption price being set forth in the table appearing below in the column “Redemption Percentage (If Sustainability Performance Target has not been satisfied and/or confirmed by External Verifier)” unless the Sustainability Performance Target has been satisfied in respect of the year ended December 31, 2025 and the Company has provided confirmation thereof to the trustee together with a related confirmation by the External Verifier by the date that is at least 15 days prior to August 15, 2026 in which case the redemption price shall be as set forth in the column “Redemption Percentage (If Sustainability Performance Target has been satisfied and confirmed by External Verifier)”) plus (2) interest payments due on the note through February 15, 2027 (excluding accrued but unpaid interest to the redemption date) computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50%, over (B) the principal amount of the note. In addition, on or after February 15, 2027, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table during the twelve-month period beginning on February 15 of the years indicated below, plus accrued and unpaid interest on the notes redeemed up to the redemption date:


Year	Redemption Percentage (If Sustainability Performance Target has been satisfied and confirmed by External Verifier)		Redemption Percentage (If Sustainability Performance Target has not been satisfied and/or confirmed by External Verifier)
2027	101.938	%	102.188	%
2028	101.292	%	101.458	%
2029	100.646	%	100.729	%
2030 and thereafter	100.000	%	100.000	%

2033 Senior Notes

At any time prior to November 1, 2027, the Company may redeem all or a part of the 2033 Senior Notes, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the note; or (ii) the excess of the present value of 103.000% of the note, plus interest payments due on the note through November 1, 2027 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50% over the principal amount of the note. In addition, on or after November 1, 2027, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed up to the redemption date:


Redemption Period	Redemption Percentage
November 1, 2027 to October 31, 2028	103.000	%
November 1, 2028 to October 31, 2029	101.500	%
November 1, 2029 and thereafter	100.000	%

2034 Senior Notes

At any time prior to November 1, 2029, the Company may redeem all or a part of the 2034 Senior Notes, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) 1% of the principal amount of the note; or (ii) the excess of the present value of 103.125% of the note, plus interest payments due on the note through November 1, 2029 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 0.50% over the principal amount of the note. In addition, on or after November 1, 2029, the Company may redeem some or all of the notes at redemption prices expressed as percentages of principal amount as set forth in the following table, plus accrued and unpaid interest on the notes redeemed up to the redemption date:


Redemption Period	Redemption Percentage
November 1, 2029 to October 31, 2030	103.125	%
November 1, 2030 to October 31, 2031	101.563	%
November 1, 2031 and thereafter	100.000	%

Receivables Securitization Facilities

In 2020, NRG Receivables LLC, a bankruptcy remote, special purpose, indirect wholly owned subsidiary (“NRG Receivables”), entered into the Receivables Facility, subject to adjustments on a seasonal basis, with issuers of asset-backed commercial paper and commercial banks (the “Lenders”). The assets of NRG Receivables are first available to satisfy the claims of the Lenders before making payments on the subordinated note and equity issued by NRG Receivables. The assets of NRG Receivables are not available to the Company and its subsidiaries or creditors unless and until distributed by NRG Receivables. Under the Receivables Facility, certain indirect subsidiaries of the Company sell their accounts receivables to NRG Receivables, subject to certain terms and conditions. In turn, NRG Receivables grants a security interest in the purchased receivables to the Lenders as collateral for cash borrowings and issuances of letters of credit. Pursuant to the Performance Guaranty, the Company has guaranteed, for the benefit of NRG Receivables and the Lenders, the payment and performance by each indirect subsidiary of its respective obligations under the Receivables Facility. The accounts receivables remain on the Company’s consolidated balance sheet and any amounts funded by the Lenders to NRG Receivables will be reflected as short-term borrowings. Cash flows from the Receivables Facility are reflected as financing activities in the Company’s consolidated statements of cash flows. The Company continues to service the accounts receivables sold in exchange for a servicing fee.

In 2020, the Company entered into the Repurchase Facility related to the Receivables Facility. Under the Repurchase Facility, the Company could borrow up to $150 million, collateralized by a subordinated note issued by NRG Receivables to NRG Retail LLC in favor of the originating entities representing a portion of the balance of receivables sold to NRG Receivables under the Receivables Facility.

On June 21, 2024, NRG Receivables LLC (“NRG Receivables”), an indirect wholly-owned subsidiary of the Company, amended its existing Receivables Facility to, among other things, (i) extend the scheduled termination date to June 20, 2025, (ii) increase the aggregate commitments from $1.4 billion to $2.3 billion (adjusted seasonally) and (iii) add a new originator. The weighted average interest rate related to usage under the Receivables Facility as of December 31, 2024 was 0.776%. As of December 31, 2024, there were no outstanding borrowings and there were $1.4 billion in letters of credit issued under the Receivables Facility.

Also on June 21, 2024, Direct Energy Services, LLC (in its capacity as additional originator, the “Additional Originator”) entered into a Joinder Agreement (the “Joinder Agreement”) to join as Additional Originator to the Receivables Sale Agreement, dated as of September 22, 2020, among Direct Energy, LP, Direct Energy Business, LLC, Green Mountain Energy Company, NRG Business Marketing, LLC, Reliant Energy Northeast LLC, Reliant Energy Retail Services, LLC, Stream SPE, Ltd., US Retailers LLC and XOOM Energy Texas, LLC, as originators, NRG Retail, as the servicer, and NRG Receivables (the “Receivables Sale Agreement”). Pursuant to the Joinder Agreement, the Additional Originator agrees to be bound by the terms of the Receivables Sale Agreement, will sell to NRG Receivables substantially all of its receivables for the sale of electricity, natural gas and/or related services and certain related rights (collectively, the “Receivables”) and in connection therewith have transferred to NRG Receivables the deposit accounts into which the proceeds of such Receivables are paid.

Concurrently with the amendments to the Receivables Facility, the Company and the originators thereunder terminated the existing uncommitted Repurchase Facility.

Tax Exempt Bonds


	As of December 31,
(In millions, except rates)	2024		2023		Interest Rate %
NRG Indian River Power 2020, tax exempt bonds, due 2040	$	57	$	57	1.250
NRG Indian River Power 2020, tax exempt bonds, due 2045	190		190		1.250
NRG Dunkirk 2020, tax exempt bonds, due 2042	59		59		4.250
City of Texas City, tax exempt bonds, due 2045	33		33		4.125
Fort Bend County, tax exempt bonds, due 2038	54		54		4.750
Fort Bend County, tax exempt bonds, due 2042	73		73		4.750
Total	$	466	$	466

Bilateral Letter of Credit Facilities

The bilateral letter of credit facilities allows for the issuance of up to $850 million of letters of credit. These facilities are uncommitted. As of December 31, 2024, $526 million was issued under these facilities.

Pre-Capitalized Trust Securities Facility

On August 29, 2023, the Company entered into a facility agreement with Alexander Funding Trust II, a newly-formed Delaware statutory trust (the “Trust”), in connection with the sale by the Trust of $500 million pre-capitalized trust securities redeemable July 31, 2028 (the “P-Caps”).

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

In connection with the issuance of the P-Caps, on August 29, 2023, the Company entered into a letter of credit facility agreement with Deutsche Bank Trust Company Americas, as collateral agent and administrative agent, and certain financial institutions for the issuance of letters of credit in an aggregate amount not to exceed $485 million. The facility is committed. As of December 31, 2024, $480 million was issued under this facility.

Non-recourse Debt

The following are descriptions of certain indebtedness of NRG’s subsidiaries. As of December 31, 2024, such non-recourse debt is no longer outstanding.

Vivint Secured Notes Tender Offer

On October 30, 2024, in connection with APX Group, Inc.’s previously announced offer to purchase for cash (the “Tender Offer”) any and all of APX Group, Inc.’s outstanding 6.750% senior secured notes due 2027 (the “Vivint 6.750% Senior Secured Notes due 2027”), APX Group, Inc. purchased $589 million in aggregate principal amount of the Vivint 6.750% Senior Secured Notes due 2027 that had been validly tendered for $600 million, which included the payment of $8 million of accrued interest. On November 8, 2024, APX Group, Inc. redeemed the remaining $11 million in aggregate principal amount of the Vivint 6.750% Senior Secured Notes due 2027 that remained outstanding following the Tender Offer. The price for the Vivint 6.750% Senior Secured Notes due 2027 was 100.411%. In connection with the redemptions, a $13 million loss on debt extinguishment was recorded, which included the write-off of previously deferred financing costs and other fees of $1 million.

Vivint Unsecured Notes Exchange Offer

In connection with the Company’s offer to exchange (the “Exchange Offer”) for any and all outstanding 5.750% Senior Notes due 2029 (the “Vivint 5.750% Senior Notes due 2029”) issued by APX Group, Inc. for the New NRG 5.750% Senior Notes due 2029 and cash, NRG accepted tenders with respect to $798 million aggregate principal amount of the Vivint 5.750% Senior Notes due 2029, that were tendered on or prior to the early tender date. In connection with the redemptions, a $90 million loss on debt extinguishment was recorded.

On October 30, 2024, the Company issued the New NRG 5.750% Senior Notes due 2029 in an aggregate principal amount of $798 million in connection with the Exchange Offer. On November 14, 2024, APX Group, Inc. redeemed the $2 million of the Vivint 5.750% Senior Notes due 2029 that remained outstanding following the Exchange Offer. The redemption price was equal to 102.875% of the aggregate principal amount.

Vivint Term Loan

On April 10, 2024, the Company’s wholly-owned indirect subsidiary, Vivint, entered into the Second Amendment to the Vivint Credit Agreement with, among others, the Vivint Agent, and certain financial institutions, as lenders, which amended the Vivint Credit Agreement in order to (i) reprice its term loan B facility (the term loans thereunder, the “Vivint Term Loans”) and (ii) make certain other modifications to the Vivint Credit Agreement as set forth therein.

At Vivint’s election, the Vivint Term Loans bear interest at a rate per annum equal to either (1) a fluctuating rate equal to the highest of (A) the rate published by the Federal Reserve Bank of New York in effect on such day, plus 0.50%, (B) the rate of interest per annum publicly announced from time to time by The Wall Street Journal as the “Prime Rate” in the United States, and (C) a rate of one-month Term SOFR (as defined in the Vivint Credit Agreement), (after giving effect to any floor applicable to Term SOFR) plus 1.00%, in each case, plus a margin of 1.75%, or (2) Term SOFR (as defined in the Vivint Credit Agreement) (which Term SOFR shall not be less than 0.50%) for a one-, three- or six-month interest period (or such other period as agreed to by the Vivint Agent and the lenders, as selected by Vivint), plus a margin of 2.75%.

On October 30, 2024, the Company repaid in full the outstanding Vivint Term Loans of approximately $1.3 billion and terminated the revolving credit facility under the Vivint Credit Agreement. In connection with the repayment, an $18 million loss on debt extinguishment was recorded, which included the write-off of previously deferred financing costs and other fees of $2 million.

Note 13 — Asset Retirement Obligations

The Company's AROs are primarily related to the environmental obligations for mine reclamation, ash disposal, site closures, fuel storage facilities and future dismantlement of equipment on leased property. In addition, the Company has also identified conditional AROs for asbestos removal and disposal, which are specific to certain power generation operations.

The following table presents the balance of ARO obligations as of December 31, 2024 and 2023, along with the activity related to the Company's ARO obligations for the year ended December 31, 2024:


(In millions)	Total(a)
Balance as of December 31, 2023	$	407
Revisions in estimates for current obligations	6
Additions	6
Spending for current obligations	(35)
Accretion	25

Balance as of December 31, 2024	$	409

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

Note 14 — Benefit Plans and Other Postretirement Benefits

NRG sponsors and operates defined benefit pension and other postretirement plans. NRG pension benefits are available to eligible non-union and union employees through various defined benefit pension plans. These benefits are based on pay, service history and age at retirement. Most pension benefits are provided through tax-qualified plans. NRG also provides postretirement health and welfare benefits for certain groups of employees. Cost sharing provisions vary by the terms of any applicable collective bargaining agreements.

NRG maintains three separate qualified pension plans, the NRG Pension Plan for Bargained Employees, the NRG Pension Plan and the Pension Plan for Employees of Direct Energy Marketing Limited (“DEML”). Participation in the NRG Pension Plan for Bargained Employees depends upon whether an employee is covered by a bargaining agreement. The NRG Pension Plan was frozen for non-union employees on December 31, 2018. In 2024, the Company commenced the termination process for the defined benefit component of the Pension Plan for Employees of DEML and expects to complete the transaction in 2025.

NRG expects to contribute $16 million to the Company's pension plans in 2025.

NRG Defined Benefit Plans

The annual net periodic benefit cost/(credit) related to NRG's pension and other postretirement benefit plans include the following components:


	Year Ended December 31,
	Pension Benefits
(In millions)	2024		2023		2022
Service cost benefits earned	$	3	$	5	$	7
Interest cost on benefit obligation	48		50		41
Expected return on plan assets	(47)		(39)		(47)
Amortization of unrecognized net loss	2		6		3
Curtailment and special termination benefits (income)/expense	(6)		(1)		14
Net periodic benefit cost	$	—	$	21	$	18


	Year Ended December 31,
	Other Postretirement Benefits
(In millions)	2024		2023		2022

Interest cost on benefit obligation	$	3	$	4	$	2
Amortization of unrecognized prior service cost	(3)		(8)		(8)
Amortization of unrecognized net loss	(1)		1		2

Net periodic benefit credit	$	(1)	$	(3)	$	(4)

A comparison of the pension benefit obligation, other postretirement benefit obligations and related plan assets for NRG's plans on a combined basis is as follows:


	As of December 31,
	Pension Benefits				Other Postretirement Benefits
(In millions)	2024		2023		2024		2023
Benefit obligation at January 1	$	1,023	$	1,036	$	75	$	84
Service cost	3		5		—		—
Interest cost	48		50		3		4

Actuarial loss/(gain)	(35)		22		(1)		(5)
Employee and retiree contributions	—		—		3		4
Annuity purchase settlement	(50)		—		—		—
Curtailment and special termination benefit loss	—		(2)		—		(1)
Benefit payments	(83)		(89)		(10)		(11)
Foreign exchange translation	(5)		1		—		—
Benefit obligation at December 31	901		1,023		70		75
Fair value of plan assets at January 1	851		844		—		—
Actual return on plan assets	16		93		—		—
Employee and retiree contributions	—		—		3		4
Employer contributions	38		2		7		7
Annuity purchase settlement	(50)		—		—		—
Benefit payments	(83)		(89)		(10)		(11)
Foreign exchange translation	(5)		1		—		—
Fair value of plan assets at December 31	767		851		—		—
Funded status at December 31 — excess of obligation over assets	$	(134)	$	(172)	$	(70)	$	(75)

During the year ended December 31, 2024, the actuarial gain of $35 million on pension benefits was primarily driven by increasing discount rates.

During the year ended December 31, 2023, the actuarial loss of $22 million on pension benefits was primarily driven by decreasing discount rates.

Amounts recognized in NRG's balance sheets were as follows:


	As of December 31,
	Pension Benefits				Other Postretirement Benefits
(In millions)	2024		2023		2024		2023
Other current liabilities	$	—	$	—	$	5	$	5
Other non-current liabilities	134		172		65		70

Amounts recognized in NRG's accumulated OCI that have not yet been recognized as components of net periodic benefit cost were as follows:


	As of December 31,
	Pension Benefits				Other Postretirement Benefits
(In millions)	2024		2023		2024		2023
Net loss/(gain)	$	73	$	73	$	(14)	$	(14)
Prior service cost/(credit)	—		—		(1)		(4)
Total accumulated OCI	$	73	$	73	$	(15)	$	(18)

Other changes in plan assets and benefit obligations recognized in OCI were as follows:


	Year Ended December 31,
	Pension Benefits				Other Postretirement Benefits
(In millions)	2024		2023		2024		2023
Net actuarial (gain)/loss	$	(4)	$	(31)	$	(1)	$	(5)
Amortization of net actuarial loss	(2)		(6)		1		(1)


Settlement (gain)/loss	6		—		—		—
Amortization of prior service cost	—		—		3		8
Effect of settlement/curtailment	—		(1)		—		(1)
Total recognized in OCI	$	—	$	(38)	$	3	$	1
Net periodic benefit cost/(credit)	—		21		(1)		(3)
Net recognized in net periodic pension (credit)/cost and OCI	$	—	$	(17)	$	2	$	(2)

The following table presents the balances of significant components of NRG's pension plan:


	As of December 31,
	Pension Benefits
(In millions)	2024		2023
Projected benefit obligation	$	901	$	1,023
Accumulated benefit obligation	895		1,015
Fair value of plan assets	767		851

NRG's market-related value of its plan assets is the fair value of the assets. The fair values of the Company's pension plan assets by asset category and their level within the fair value hierarchy are as follows:


	Fair Value Measurements as of December 31, 2024
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Total
Common/collective trust investment — U.S. equity	$	—	$	142	$	142
Common/collective trust investment — non-U.S. equity	—		105		105
Common/collective trust investment — non-core assets	—		50		50
Common/collective trust investment — fixed income	—		199		199
Short-term investment fund	25		—		25
Subtotal fair value	$	25	$	496	$	521
Measured at net asset value practical expedient:
Common/collective trust investment — non-U.S. equity					29
Common/collective trust investment — fixed income					177
Common/collective trust investment — non-core assets					12
Partnerships/joint ventures					28
Total fair value					$	767


	Fair Value Measurements as of December 31, 2023
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Total
Common/collective trust investment — U.S. equity	$	—	$	156	$	156
Common/collective trust investment — non-U.S. equity	—		58		58
Common/collective trust investment — non-core assets	—		81		81
Common/collective trust investment — fixed income	—		188		188
Short-term investment fund	19		—		19
Subtotal fair value	$	19	$	483	$	502
Measured at net asset value practical expedient:
Common/collective trust investment — non-U.S. equity					32
Common/collective trust investment — fixed income					243
Common/collective trust investment — non-core assets					47
Partnerships/joint ventures					27
Total fair value					$	851

In accordance with ASC 820, the Company determines the level in the fair value hierarchy within which each fair value measurement in its entirety falls, based on the lowest level input that is significant to the fair value measurement in its entirety. The fair value of the common/collective trust investments is valued at fair value which is equal to the sum of the market value of all of the fund's underlying investments. Certain common/collective trust investments have readily determinable fair value as they publish daily net asset value, or NAV, per share and are categorized as Level 2. Certain other common/collective trust investments and partnerships/joint ventures use NAV per share, or its equivalent, as a practical expedient for valuation, and thus have been removed from the fair value hierarchy table.

The following table presents the significant assumptions used to calculate NRG's benefit obligations:


	As of December 31,
	Pension Benefits				Other Postretirement Benefits
Weighted-Average Assumptions	2024		2023		2024		2023
Discount rate	5.63	%	4.97	%	5.55	%	4.96	%
Interest crediting rate	5.38	%	5.67	%	4.54	%	4.66	%
Rate of compensation increase	3.00	%	3.06	%	—		—
Health care trend rate	—		—		8.3% grading to 4.5% in 2034		7.7% grading to 4.5% in 2033

The following table presents the significant assumptions used to calculate NRG's benefit expense:


	As of December 31,
	Pension Benefits						Other Postretirement Benefits
Weighted-Average Assumptions	2024		2023		2022		2024		2023		2022
Discount rate	4.99	%	5.18	%	2.89%/4.71%/5.41%		4.96	%	5.19	%	2.82	%
Interest crediting rate	5.67	%	5.21	%	3.07	%	4.66	%	4.00	%	1.94	%
Expected return on plan assets	6.65	%	5.55	%	4.99	%	—		—		—
Rate of compensation increase	3.00	%	3.06	%	3.06	%	—		—		—
Health care trend rate	—		—		—		7.4% grading to 4.5% in 2033		7.2% grading to 4.5% in 2028		6.9% grading to 4.4% in 2028

NRG uses December 31 of each respective year as the measurement date for the Company's pension and other postretirement benefit plans. The Company sets the discount rate assumptions on an annual basis for each of NRG's defined benefit retirement plans as of December 31. The discount rate assumptions represent the current rate at which the associated liabilities could be effectively settled at December 31. The Company utilizes the Aon AA Above Median, or AA-AM, yield curve and the AON Canada yield curve to select the appropriate discount rate assumption for its retirement plans. The AA-AM yield curve is a hypothetical AA yield curve represented by a series of annualized individual spot discount rates from 6 months to 99 years. Under the AA-AM yield curve, each bond issue used to build this yield curve must be non-callable, and have an average rating of AA when averaging available Moody's Investor Services, Standard & Poor's and Fitch ratings. The AON Canada yield curve is based on high quality corporate bonds. Under the AON Canada yield curve, expected plan cash flows were discounted using the yield curve, and then a single rate is determined which produces an equivalent present value.

NRG employs a total return investment approach, whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The Investment Committee reviews the asset mix periodically and as the plan assets increase in future years, the Investment Committee may examine other asset classes such as real estate or private equity. NRG employs a building block approach to determining the long-term rate of return assumption for plan assets, with proper consideration given to diversification and rebalancing. Historical markets are studied and long-term historical relationships between equities and fixed income are preserved, consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. Peer data and historical returns are reviewed to check for reasonableness and appropriateness.

The target allocations of NRG's pension plan assets were as follows for the year ended December 31, 2024:


U.S. equity	20	%
Non-U.S. equity	13	%
Non-core assets	17	%
Fixed income	50	%

Plan assets are currently invested in a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across U.S., non-U.S., global, and emerging market equities, as well as among growth, value, small and large capitalization stocks.

Investment risk and performance are monitored on an ongoing basis through quarterly portfolio reviews of each asset fund class to a related performance benchmark, if applicable, and annual pension liability measurements. Performance benchmarks are composed of the following indices:


Asset Class						Index
U.S. equities						Dow Jones U.S. Total Stock Market Index
Non-U.S. equities						MSCI All Country World Index
Non-core assets(a)						Various (per underlying asset class)
Fixed income securities						Barclays Short, Intermediate and Long Credits/Barclays Strips 20+ Index and FTSE Canada Universe Bond Index

(a)Non-Core Assets are defined as diversifying asset classes approved by the Investment Committee that are intended to enhance returns and/or reduce volatility of the U.S. and non-U.S. equities. Asset classes considered Non-Core include, but may not be limited to: Emerging Market Equity, Emerging Market Debt, Non-US Developed Market Small Cap, High Yield Fixed Income, Real Estate, Bank Loans, Global Infrastructure and other Alternatives

NRG's expected future benefit payments for each of the next five years, and in the aggregate for the five years thereafter, are as follows:


	Pension		Other Postretirement Benefit
(In millions)	Benefit Payments		Benefit Payments		Medicare Prescription Drug Reimbursements
2025	$	93	$	5	$	—
2026	77		5		—
2027	75		5		—
2028	73		5		—
2029	71		5		—
2030-2034	336		28		2

Defined Contribution Plans

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

The Company's costs related to these plans were as follows:


	Year Ended December 31,
(In millions)	2024		2023		2022
Cost recognized for defined contribution plans	$	62	$	61	$	37

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

Note 15 — Capital Structure

For the period from December 31, 2021 to December 31, 2024, the Company had 10,000,000 shares of preferred stock authorized and 500,000,000 shares of common stock authorized. The following table reflects the changes in NRG's preferred and common shares issued and outstanding for each period presented:


	Preferred Shares	Common Shares
	Issued and Outstanding	Issued	Treasury	Outstanding
Balance as of December 31, 2021	—	423,547,174	(179,793,275)	243,753,899
Shares issued under ESPP	—	—	142,825	142,825
Shares issued under LTIPs	—	349,827	—	349,827
Share repurchases	—	—	(14,685,521)	(14,685,521)
Balance as of December 31, 2022	—	423,897,001	(194,335,971)	229,561,030
Issuance of Series A Preferred Stock	650,000	—	—	—
Shares issued under ESPP	—	—	191,249	191,249
Shares issued under LTIPs	—	1,109,611	—	1,109,611
Share repurchases	—	—	(22,730,940)	(22,730,940)
Retirement of treasury stock	—	(157,676,142)	157,676,142	—
Balance as of December 31, 2023	650,000	267,330,470	(59,199,520)	208,130,950
Shares issued under ESPP	—	—	242,070	242,070
Shares issued under LTIPs	—	1,959,134	—	1,959,134
Share repurchases	—	—	(11,725,563)	(11,725,563)
Partial settlement of Capped Call Options	—	—	(2,588)	(2,588)
Retirement of treasury stock	—	(64,225,546)	64,225,546	—
Balance as of December 31, 2024	650,000	205,064,058	(6,460,055)	198,604,003
Shares issued under LTIPs	—	540,996	—	540,996
Share repurchases	—	—	(1,076,423)	(1,076,423)
Retirement of treasury stock	—	(1,028,193)	1,028,193	—
Balance as of January 31, 2025	650,000	204,576,861	(6,508,285)	198,068,576

Common Stock

As of December 31, 2024, NRG had 25,400,076 shares of common stock reserved for the maximum number of shares potentially issuable based on the conversion and redemption features of the long-term incentive plans.

Common Stock Dividends

The Company declared and paid $0.4075, $0.3775 and $0.350 quarterly dividend per common share, or $1.63, $1.51 and $1.40 per share on an annualized basis for 2024, 2023 and 2022 respectively.

In 2022, 2023 and 2024, NRG increased the annual dividend on its common stock to $1.40, $1.51 and $1.63 per share, respectively, representing an 8% increase each year. Beginning in the first quarter of 2025, NRG will increase the annual common stock dividend by 8% to $1.76 per share. The long-term capital allocation policy targets an annual common stock dividend growth rate of 7%-9% per share in subsequent years.

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

On January 22, 2025, NRG declared a quarterly dividend on the Company's common stock of $0.44 per share, or $1.76 per share on an annualized basis, payable on February 18, 2025, to stockholders of record as of February 3, 2025.

Employee Stock Purchase Plan

The Company offers participation in the ESPP which allows eligible employees to elect to withhold between 1% and 10% of their eligible compensation to purchase shares of NRG common stock at the lesser of 90% of its market value on the offering date or 90% of the fair market value on the exercise date. An offering date occurs each April 1 and October 1. An exercise date occurs each September 30 and March 31. As of December 31, 2024, there remained 6,460,055 shares of treasury stock reserved for issuance under the ESPP.

Share Repurchases

During the year ended December 31, 2022, the Company completed $595 million of share repurchases at an average price per share of $40.48. 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. In October 2024, the Board of Directors authorized an additional $1.0 billion for share repurchases as part of the existing share repurchase authorization. As of January 31, 2025, $1.5 billion is remaining under the $3.7 billion authorization. The following table summarizes the share repurchases made under the $3.7 billion authorization through January 31, 2025:


	Total number of shares purchased	Average price paid per share		Amounts paid for shares purchased (in millions)


2023 Repurchases:
Open market repurchases	5,054,798	$	39.56	$	200
Repurchases made under the accelerated share repurchase agreements	17,676,142	(a)		950
Total Share Repurchases during 2023	22,730,940			1,150		(b)
2024 Repurchases:
Repurchases made under the accelerated share repurchase agreements	1,163,230	(a)		—
Open market repurchases	10,562,333	87.57		925
Total Share Repurchases during 2024	11,725,563			925		(c)
Repurchases made subsequent to December 31, 2024 thru January 31, 2025	1,076,423	101.07		109
Total Share Repurchases made under the $3.7 billion authorization	35,532,926	$	61.46	$	2,184

(a)Under the November 6, 2023 ASR, the Company received a total of 18,839,375 shares for an average price per share of $50.43, excluding the impact of the excise tax incurred. See discussion below for further information of the ASR agreements

(b)Excludes $10 million of excise tax accrued in 2023 which was paid in 2024

(c)Excludes $9 million accrued for estimated excise tax owed as of December 31, 2024

On November 6, 2023, the Company executed Accelerated Share Repurchase agreements to repurchase a total of $950 million of NRG's outstanding common stock based on volume-weighted average prices. The Company received 17,676,142 shares in the fourth quarter of 2023, which were recorded in treasury stock at fair value based on the volume-weighted average closing prices of $833 million, with the remaining $117 million recorded in additional paid in capital, representing the value of the forward contracts to purchase additional shares. During the first quarter of 2024, the Company received an additional 1,163,230 shares pursuant to the ASR agreements. Upon receipt of the final shares, the Company transferred the $117 million from additional paid-in-capital to treasury stock.

Retirement of Treasury Stock

During the years ended December 31, 2024 and 2023, the Company retired shares of treasury stock as detailed below. These retired shares are now included in NRG's pool of authorized but unissued shares. The Company's accounting policy upon the formal retirement of treasury stock is to deduct its par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital.


	Total number of treasury shares retired	Average price per share		Carrying value of treasury shares retired (in millions)



Shares retired during the year ended December 31, 2023	157,676,142	$	31.77	$	5,009
Shares retired during the year ended December 31, 2024	64,225,546	$	41.07	$	2,638

Capped Call Options

During the second quarter of 2024, the Company entered into privately negotiated capped call transactions with certain counterparties (the "Capped Calls"). The Capped Calls each have a strike price of $40.94 per share, subject to certain adjustments, which correspond to the conversion price of the Convertible Senior Notes as of December 31, 2024. The Capped Calls have a cap price of $249.00 per share, subject to certain adjustments, and effectively lock in a conversion premium of $257 million on the remaining $232 million balance of the Convertible Senior Notes. The options will expire on June 1, 2025 if not exercised. The Capped Calls are separate transactions and not part of the terms of the Convertible Senior Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity. The option price of $257 million incurred in connection with the Capped Calls, of which $253 million was recorded as a reduction to additional paid-in capital and a $4 million loss was recorded to other income, net to account for the change in the value of the Capped

Calls during the calculation period which began on May 31, 2024 and concluded on June 28, 2024. The option price will be payable upon the earlier of settlement and expiration of the applicable Capped Calls.

Preferred Stock

Series A Preferred Stock

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

The Series A Preferred Stock is not convertible into or exchangeable for any other securities or property and has limited voting rights. The Series A Preferred Stock may be redeemed, in whole or in part, on one or more occasions, at the option of the Company at any time after March 15, 2028 ("Series A First Reset Date") and in certain other circumstances prior to the Series A First Reset Date. The Series A Preferred Stock has a liquidation preference of $1,000 per share, plus accumulated but unpaid dividends.

Series A Preferred Stock Dividends

The annual dividend rate on each share of Series A Preferred Stock is 10.25% from the Series A Issuance Date to, but excluding the Series A First Reset Date. On and after the Series A First Reset Date, the dividend rate on each share of Series A Preferred Stock shall equal the five-year U.S. Treasury rate as of the most recent reset dividend determination date (subject to a floor of 1.00%), plus a spread of 5.92% per annum. Cumulative cash dividends on the Series A Preferred Stock are payable semiannually, in arrears, on each March 15 and September 15, when, as and if declared by the Board of Directors.

In March and September 2024, the Company declared and paid semi-annual dividends of $51.25 per share on its outstanding Series A Preferred Stock, each totaling $33 million. In September 2023, the Company declared and paid a semi-annual dividend of $52.96 per share, totaling $34 million.

Note 16 — Investments Accounted for by the Equity Method and Variable Interest Entities

Entities that are not Consolidated

NRG accounts for the Company's significant investments using the equity method of accounting. NRG's carrying value of equity investments can be impacted by a number of elements including impairments and movements in foreign currency exchange rates.

The following table summarizes NRG's equity method investments as of December 31, 2024:


(In millions, except percentages)
Name:	Economic Interest		Investment Balance
Gladstone(a)	37.5	%	$	34
Midway-Sunset Cogeneration Company	50.0	%	11

Total equity investments in affiliates			$	45

(a)As of December 31, 2024, the carrying value of NRG's equity method investment was $39 million lower than the underlying net assets of the investee. The basis difference is being amortized into net income over the remaining estimated useful lives of the underlying net assets. For the year ended December 31, 2024, the Company recorded $7 million of impairment losses on Gladstone. Refer to Note 10, Asset Impairments

The following table summarizes the undistributed earnings from NRG's equity method investments as of December 31, 2024:


	As of December 31,
(In millions)	2024		2023
Undistributed earnings	$	5	$	—

Other Equity Investments

Gladstone — Through a joint venture, NRG owns a 37.5% interest in Gladstone, a 1,613 MW coal-fueled power generation facility in Queensland, Australia. The power generation facility is managed by the joint venture participants and the facility is operated by NRG. Operating expenses incurred in connection with the operation of the facility are funded by each of the participants in proportion to their ownership interests. Coal is sourced from local mines in Queensland. NRG and the joint venture participants receive their respective share of revenues directly from the off takers in proportion to the ownership interests in the joint venture. Power generated by the facility is primarily sold to an adjacent aluminum smelter, with excess power sold to the Queensland Government-owned utility under long-term supply contracts. NRG's investment in Gladstone was $34 million as of December 31, 2024.

Variable Interest Entities that are Consolidated

The Company has a controlling financial interest that has been identified as a VIE under ASC 810 in NRG Receivables LLC, which has entered into financing transactions related to the Receivables Facility as further described in Note 12, Long-term Debt and Finance Leases.

The summarized financial information for the Company's consolidated VIE consisted of the following:


(In millions)	December 31, 2024		December 31, 2023
Accounts receivable and Other current assets	$	2,402	$	1,541




Current liabilities	155		153




Net assets	$	2,247	$	1,388

Note 17 — Income/(Loss) Per Share

Basic income/(loss) per common share is computed by dividing net income/(loss) less cumulative dividends attributable to preferred stock by the weighted average number of common shares outstanding. Shares issued and treasury shares repurchased during the year are weighted for the portion of the year that they were outstanding. Diluted income/(loss) per share is computed in a manner consistent with that of basic income/(loss) per share, while giving effect to all potentially dilutive common shares that were outstanding during the period when there is net income.

Dilutive effect for equity compensation and other equity instruments — The relative performance stock units and non-vested restricted stock units are not considered outstanding for purposes of computing basic income/(loss) per share. However, these instruments are included in the denominator for purposes of computing diluted income/(loss) per share under the treasury stock method for periods when there is net income. The Convertible Senior Notes are convertible, under certain circumstances, into cash or combination of cash and Company’s common stock. The Company is including the potential share settlements, if any, in the denominator for purposes of computing diluted income/(loss) per share under the if converted method for periods when there is net income. The potential shares settlements are calculated as the excess of the Company's conversion obligation over the aggregate principal amount (which will be settled in cash), divided by the average share price for the period.

The reconciliation of NRG's basic and diluted income/(loss) per share is shown in the following table:


	Year Ended December 31,
(In millions, except per share amounts)	2024		2023		2022
Basic income/(loss) per share:
Net income/(loss)	$	1,125	$	(202)	$	1,221
Less: Cumulative dividends attributable to Series A Preferred Stock	67		54		—
Income/(Loss) Available to Common Stockholders	$	1,058	$	(256)	$	1,221
Weighted average number of common shares outstanding - basic	206		228		236
Income/(Loss) per weighted average common share — basic	$	5.14	$	(1.12)	$	5.17
Diluted income/(loss) per share:
Net income/(loss)	$	1,125	$	(202)	$	1,221
Less: Cumulative dividends attributable to Series A Preferred Stock	67		54		—
Income/(Loss) Available to Common Stockholders	$	1,058	$	(256)	$	1,221
Weighted average number of common shares outstanding - basic	206		228		236
Incremental shares attributable to the issuance of equity compensation (treasury stock method)	3		—		—
Incremental shares attributable to the potential share settlement of Convertible Senior Notes (if converted method)	3		—		—
Weighted average number of common shares outstanding - diluted	212		228		236
Income/(Loss) per weighted average common share — diluted	$	4.99	$	(1.12)	$	5.17

As of December 31, 2024 and 2022, the Company had an insignificant number of outstanding equity instruments that were anti-dilutive and were not included in the computation of the Company’s diluted income per share. As of December 31, 2023, the Company had 6 million of outstanding equity instruments that were anti-dilutive and were not included in the computation of the Company’s diluted loss per share.

Note 18 — Segment Reporting

The Company’s segment structure reflects how management makes financial decisions and allocates resources. The Company manages its operations based on the combined results of the retail, wholesale and generation businesses with a geographical focus except for Vivint Smart Home operations which are reported within the Vivint Smart Home segment. Corporate represents the corporate business activities, and corporate shared services, to support the Company’s operating segments. Beginning in the fourth quarter of 2024, Corporate now includes interest expense related to its consolidated debt financing activities and income tax expense related to its consolidated U.S. federal, foreign and state income taxes conforming to the way the Company internally manages and monitors the business. Prior periods amounts have been recast for comparative purposes to reflect this change, which had no impact on the Company’s consolidated financial position, results of operations, and cash flows. The accounting policies of the segments are the same as those applied in the consolidated financial statements as disclosed in Note 2, Summary of Significant Accounting Policies.

NRG's chief operating decision maker ("CODM"), its chief executive officer, uses more than one measure to evaluate the performance of its segments and allocate resources, including net income/(loss) and various non-GAAP financial measures such as adjusted earnings before interest, taxes, depreciation and amortization, or Adjusted EBITDA. Net income/(loss) and Adjusted EBITDA are used to review business performance and allocate resources as it provides a clearer view of segment profitability by focusing on operational performance. Additionally, operating expenses’ impact on each operating segment results are analyzed. On a monthly basis, Adjusted EBITDA is compared against the budget, latest forecast, and prior period.

The Company had no customer that comprised more than 10% of the Company's consolidated revenues during the years ended December 31, 2024, 2023 and 2022.

Intersegment sales are accounted for at market.


	For the Year Ended December 31, 2024
(In millions)	Texas		East		West/Services/Other		Vivint Smart Home		Corporate(a)		Eliminations		Total
Revenue(a)	$	10,653	$	11,707	$	3,886	$	1,932	$	—	$	(48)	$	28,130
Operating Expenses	9,785		9,746		3,874		1,037		81		(48)		24,475

Depreciation and amortization	323		158		114		767		41		—		1,403











Impairment losses	7		—		29		—		—		—		36

Total operating cost and expenses	10,115		9,904		4,017		1,804		122		(48)		25,914

(Loss)/gain on sale of assets	(4)		3		209		—		—		—		208
Operating income/(loss)	534		1,806		78		128		(122)		—		2,424
Equity in earnings of unconsolidated affiliates	—		—		20		—		—		—		20
Impairment losses on investments	—		—		(7)		—		—		—		(7)
Other income, net	—		(1)		6		(15)		54		—		44
Loss on debt extinguishment	—		—		—		—		(382)		—		(382)
Interest expense	—		—		—		—		(651)		—		(651)
Income/(loss) before income taxes	534		1,805		97		113		(1,101)		—		1,448
Income tax expense	—		—		—		—		323		—		323




Net income/(loss)	$	534	$	1,805	$	97	$	113	$	(1,424)	$	—	$	1,125

Balance sheet
Equity investments in affiliates	$	—	$	—	$	45	$	—	$	—	$	—	$	45
Capital expenditures	369		3		16		23		61		—		472
Goodwill	643		721		153		3,494		—		—		5,011
Total assets	$	6,925	$	8,021	$	2,254	$	6,624	$	15,543	$	(15,345)	$	24,022


(a) Inter-segment sales and inter-segment net derivative gains and losses included in revenues	$	22	$	—	$	18	$	8	$	—	$	—	$	48


	For the Year Ended December 31, 2023
(In millions)	Texas		East		West/Services/Other		Vivint Smart Home(a)		Corporate(b)		Eliminations		Total
Revenue(b)	$	10,476	$	12,547	$	4,281	$	1,549	$	—	$	(30)	$	28,823
Operating Expenses	8,353		14,361		5,021		858		133		(30)		28,696

Depreciation and amortization	348		167		99		645		36		—		1,295











Impairment losses	2		4		20		—		—		—		26

Total operating cost and expenses	8,703		14,532		5,140		1,503		169		(30)		30,017

Gain on sale of assets	1,319		259		—		—		—		—		1,578
Operating income/(loss)	3,092		(1,726)		(859)		46		(169)		—		384
Equity in earnings of unconsolidated affiliates	—		—		16		—		—		—		16
Impairment losses on investments	—		—		(102)		—		—		—		(102)
Other income, net	2		(1)		1		(15)		60		—		47
Gain on debt extinguishment	—		—		—		—		109		—		109
Interest expense	—		—		—		—		(667)		—		(667)
Income/(loss) before income taxes	3,094		(1,727)		(944)		31		(667)		—		(213)
Income tax benefit	—		—		—		—		(11)		—		(11)




Net income/(loss)	$	3,094	$	(1,727)	$	(944)	$	31	$	(656)	$	—	$	(202)

Balance sheet
Equity investments in affiliates	$	—	$	—	$	42	$	—	$	—	$	—	$	42
Capital expenditures	495		5		27		18		53		—		598
Goodwill	643		721		221		3,494		—		—		5,079
Total assets(c)	$	8,236	$	13,712	$	3,612	$	6,619	$	20,357	$	(26,498)	$	26,038


(a) Includes results of operations following the acquisition date of March 10, 2023
(b) Inter-segment sales and inter-segment net derivative gains and losses included in revenues	$	5	$	9	$	16	$	—	$	—	$	—	$	30
(c) Tax related balances have been recast to Corporate for comparative purposes


	For the Year Ended December 31, 2022
(In millions)	Texas		East		West/Services/Other		Corporate(a)		Eliminations		Total
Revenue(a)	$	10,057	$	16,763	$	4,706	$	—	$	17	$	31,543
Operating Expenses	8,444		15,998		4,106		86		17		28,651

Depreciation and amortization	361		241		87		31		—		720











Impairment losses	—		206		—		—		—		206

Total operating cost and expenses	8,805		16,445		4,193		117		17		29,577

Gain/(loss) on sale of assets	10		—		45		(3)		—		52
Operating income	1,262		318		558		(120)		—		2,018
Equity in (losses)/earnings of unconsolidated affiliates	(2)		—		8		—		—		6

Other income, net	4		1		1		50		—		56

Interest expense	—		—		—		(417)		—		(417)
Income/(loss) before income taxes	1,264		319		567		(487)		—		1,663
Income tax expense	—		—		—		442		—		442
Net income/(loss)	$	1,264	$	319	$	567	$	(929)	$	—	$	1,221


(a) Inter-segment sales and inter-segment net derivative gains and losses included in revenues			$	4					$	(26)					$	5					$	—					$	—					$	(17)

Note 19 — Income Taxes

The income tax provision consisted of the following amounts:


	Year Ended December 31,
(In millions, except effective income tax rate)	2024			2023			2022
Current
U.S. Federal	$	55		$	26		$	3
State	82			84			65
Foreign	5			(12)			3
Total — current	142			98			71
Deferred
U.S. Federal	333			50			258
State	(134)			(61)			59
Foreign	(18)			(98)			54
Total — deferred	181			(109)			371
Total income tax expense/(benefit)	$	323		$	(11)		$	442
Effective income tax rate	22.3		%	5.2		%	26.6		%

The IRA enacted on August 16, 2022, introduced new provisions including a 15% corporate alternative minimum tax and a 1% excise tax on net share repurchases with both taxes effective beginning in fiscal year 2023 for NRG. On September 12, 2024, Treasury and the IRS released proposed regulations that provide guidance on the application of the CAMT. The proposed regulations allow the exclusion of unrealized mark-to-market gains and losses, related to qualified hedge transactions, from adjusted financial statement income. The Company will continue to evaluate the applicable corporation status and the impact of the CAMT based on the proposed guidance. As of December 31, 2024, NRG as an applicable corporation is subject to the CAMT, and has reflected the impact in its current and deferred taxes. There is no impact on the Company’s provision for income taxes from the CAMT as of December 31, 2024.

The following represented the domestic and foreign components of income/(loss) before income taxes:


	Year Ended December 31,
(In millions)	2024		2023		2022
U.S.	$	1,485	$	261	$	1,436
Foreign	(37)		(474)		227
Total	$	1,448	$	(213)	$	1,663

Reconciliations of the U.S. federal statutory tax rate to NRG's effective tax rate were as follows:


	Year Ended December 31,
(In millions, except effective income tax rate)	2024			2023			2022
Income/(Loss) before income taxes	$	1,448		$	(213)		$	1,663
Tax at federal statutory tax rate	304			(45)			349
State taxes	92			(22)			69
Foreign rate differential	1			(10)			7
Changes in state valuation allowances	(110)			42			(3)
Nondeductible loss on Convertible Senior Notes repurchases	56			—			—
Permanent differences	23			31			17
Stock compensation	(19)			—			—
Recognition of uncertain tax benefits	1			12			8


Deferred impact of state tax rate changes	(24)			3			14

Foreign tax refunds	—			(17)			—
Return to provision adjustments	(1)			(5)			—
Carbon capture tax credits	—			—			(19)





Income tax expense/(benefit)	$	323		$	(11)		$	442
Effective income tax rate	22.3		%	5.2		%	26.6		%

For the year ended December 31, 2024, NRG's effective income tax rate was higher than the federal statutory tax rate of 21% primarily due to permanent differences and state tax expense partially offset by tax benefits from the revaluation of state deferred tax assets, and decrease of certain state valuation allowances.

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

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

The temporary differences, which gave rise to the Company's deferred tax assets and liabilities consisted of the following:


	As of December 31,
(In millions)	2024		2023
Deferred tax assets:
U.S. Federal net operating loss carryforwards	$	1,477	$	1,762
State net operating loss carryforwards	341		367
Foreign net operating loss carryforwards	106		110
Deferred revenues	335		347
Difference between book and tax basis of property	322		353
Federal and state tax credit carryforwards	269		317
Deferred compensation, accrued vacation and other reserves	174		141
Interest disallowance carryforward per §163(j) of the Tax Act	77		132
Pension and other postretirement benefits	46		48
Allowance for credit losses	37		35
Equity compensation	30		24

Federal benefit on state uncertain tax positions	13		13

Inventory obsolescence	13		11
U.S. capital loss	1		1
Other	46		33

Total deferred tax assets	3,287		3,694
Deferred tax liabilities:
Intangibles amortization (excluding goodwill)	486		726
Derivatives	193		156
Capitalized contract costs	249		131
Equity method investments	88		93
Goodwill	56		40
Debt discount amortization	—		26
Emissions allowances	16		18



Total deferred tax liabilities	1,088		1,190
Total deferred tax assets less deferred tax liabilities	2,199		2,504
Valuation allowance	(144)		(275)

Total net deferred tax assets, net of valuation allowance	$	2,055	$	2,229

The following table summarizes NRG's net deferred tax position as presented in the consolidated balance sheets:


	As of December 31,
(In millions)	2024		2023
Deferred tax asset	$	2,067	$	2,251

Deferred tax liability	(12)		(22)
Net deferred tax asset	$	2,055	$	2,229

The primary drivers for the decrease in the net deferred tax asset from $2.2 billion as of December 31, 2023 to $2.1 billion as of December 31, 2024 is due to utilization of net operating losses, partially offset by the decrease of certain state valuation allowances.

Deferred tax assets and valuation allowance

Net deferred tax balance — As of December 31, 2024 and 2023, NRG recorded a net deferred tax asset, excluding valuation allowance, of $2.2 billion and $2.5 billion, respectively. The Company believes certain state net operating losses may not be realizable under the more-likely-than-not measurement and as such, a valuation allowance was recorded as of December 31, 2024 as discussed below.

NOL carryforwards — As of December 31, 2024, the Company had tax-effected cumulative U.S. NOLs consisting of carryforwards for federal and state income tax purposes of $1.5 billion and $341 million, respectively. In addition, NRG has tax-effected cumulative foreign NOL carryforwards of $106 million. The majority of NRG's NOL carryforwards have no expiration date.

Valuation allowance — As of December 31, 2024, the Company's tax-effected valuation allowance was $144 million, consisting of state NOL carryforwards and foreign NOL carryforwards. The valuation allowance was recorded based on the assessment of cumulative and forecasted pre-tax book earnings and the future reversal of existing taxable temporary differences.

Taxes Receivable and Payable

As of December 31, 2024, NRG recorded a current federal payable of $1 million, a current net state receivable of $1 million and a current net foreign receivable of $8 million.

Uncertain tax benefits

NRG has identified uncertain tax benefits with after-tax value of $57 million and $73 million as of December 31, 2024 and 2023, for which NRG has recorded a non-current tax liability of $62 million and $76 million, respectively. The Company recognizes interest and penalties related to uncertain tax benefits in income tax expense. The Company recognized $2 million of interest expense for the year ended December 31, 2024, and $1 million for the years ended December 31, 2023 and 2022. As of December 31, 2024 and 2023, NRG had cumulative interest and penalties related to these uncertain tax benefits of $5 million and $3 million, respectively.

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

The Company is no longer subject to U.S. federal income tax examinations for years prior to 2021. With few exceptions, state and Canadian income tax examinations are no longer open for years before 2015.

The following table summarizes uncertain tax benefits activity:


	As of December 31,
(In millions)	2024		2023
Balance as of January 1	$	73	$	22
Increase due to current year positions	12		28
Increase due to acquired balance from Vivint Smart Home	—		23

Settlements, payments and statute closure	(28)		—
Uncertain tax benefits as of December 31	$	57	$	73

Note 20 — Stock-Based Compensation

The Company's stock-based compensation consists of awards granted under the NRG LTIP and following the Acquisition in March 2023, the Vivint LTIP.

NRG Energy, Inc. Long-Term Incentive Plan

As of December 31, 2024 and 2023, a total of 25,000,000 shares of NRG common stock were authorized for issuance under the NRG LTIP. There were 7,188,824 and 7,717,139 shares of common stock remaining available for grants under the NRG LTIP as of December 31, 2024 and 2023, respectively. The NRG LTIP is subject to adjustments in the event of reorganization, recapitalization, stock split, reverse stock split, stock dividend, and a combination of shares, merger or similar change in NRG's structure or outstanding shares of common stock. As of December 31, 2024, the outstanding awards under the NRG LTIP include restricted stock units, deferred stock units and relative performance stock units.

Restricted Stock Units

As of December 31, 2024, RSUs granted under the NRG LTIP typically have three-year graded vesting schedules beginning on the grant date. Fair value of the RSUs granted during 2024 and 2023 is derived from the closing price of NRG common stock on the grant date. The following table summarizes the Company's non-vested RSU awards and changes during the year:


	Units	Weighted Average Grant Date Fair Value per Unit
Non-vested at December 31, 2023	1,210,840	$	37.88
Granted	413,872	51.89
Forfeited	(49,082)	39.43
Vested	(525,470)	38.38

Non-vested at December 31, 2024	1,050,160	42.95

The total fair value of RSUs vested during the years ended December 31, 2024, 2023 and 2022 was $47 million, $20 million and $10 million, respectively. The weighted average grant date fair value of RSUs granted during the years ended December 31, 2024, 2023 and 2022 was $51.89, $35.71 and $41.26, respectively.

Deferred Stock Units

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

The following table summarizes the Company's outstanding DSU awards and changes during the year:


	Units	Weighted Average Grant Date Fair Value per Unit
Outstanding at December 31, 2023	443,287	$	29.07
Granted	46,617	76.31

Converted to Common Stock	(112,784)	30.73

Outstanding at December 31, 2024	377,120	33.91

The aggregate intrinsic values for DSUs outstanding as of December 31, 2024, 2023 and 2022 were approximately $34 million, $23 million and $13 million, respectively. The aggregate intrinsic values for DSUs converted to common stock for the years ended December 31, 2024, 2023 and 2022 were $10 million, $3 million and $1 million, respectively. The weighted average grant date fair value of DSUs granted during the years ended December 31, 2024, 2023 and 2022 was $76.31, $34.40 and $45.49, respectively.

Relative Performance Stock Units

RPSUs entitle the recipient to stock upon vesting. The amount of the award is subject to the Company's achievement of certain performance measures over the vesting period. RPSUs are restricted grants where the quantity of shares increases and decreases alongside the Company's Total Shareholder Return ("TSR"), relative to the TSR of the Company's current proxy peer group and the total returns of select indexes, or Peer Group. The peer group consists of the companies that comprise the Standard & Poor’s 500 Index on the first day of the performance period. Each RPSU represents the potential to receive NRG common stock after the completion of the performance period, typically three years of service from the date of grant. The number of shares of NRG common stock to be paid (if any) as of the vesting date for each RPSU will depend on the Company’s percentile rank within the Peer Group. The number of shares of common stock to be paid as of the vesting date for each RPSU is linearly interpolated for TSR performance between the following points: (i) 0% if ranked below the 25th percentile; (ii) 25% if ranked at the 25th percentile; (iii) 100% if ranked at the 55th percentile (or the 65th percentile if the Company's absolute TSR is less than negative 15%); and (iv) 200% if ranked at the 75th percentile or above.

The following table summarizes the Company's non-vested RPSU awards and changes during the year:


	Units	Weighted Average Grant-Date Fair Value per Unit
Non-vested at December 31, 2023	671,889	$	46.27
Granted	380,370	62.48
Forfeited	(22,623)	52.55
Vested	(316,685)	49.50
Non-vested at December 31, 2024	712,951	53.10

The weighted average grant date fair value of RPSUs granted during the years ended December 31, 2024, 2023 and 2022, was $62.48, $39.46 and $57.41, respectively.

The fair value of RPSUs is estimated on the date of grant using a Monte Carlo simulation model and expensed over the service period, which equals the vesting period. Significant assumptions used in the fair value model with respect to the Company's RPSUs are summarized below:


	2024		2023		2022

Expected volatility	34.46	%	41.35	%	37.54	%
Expected term (in years)	3		3		3
Risk free rate	4.05	%	4.18	%	0.97	%

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

NRG Energy, Inc. 2020 Omnibus Incentive Plan (Legacy Vivint)

Effective March 10, 2023, in connection with the Vivint Smart Home Acquisition, as discussed in Note 4, Acquisitions and Dispositions, NRG assumed the NRG Energy, Inc. 2020 Omnibus Incentive Plan (Legacy Vivint) (formerly known as Vivint Smart Home, Inc. Long-Term Incentive Plan) or Vivint LTIP. In addition to the rollover awards converted as part of the Acquisition, the Vivint LTIP provides for issuances of time-based restricted stock units and performance-based restricted stock units. As of December 31, 2024 and 2023, 17,500,000 shares of NRG common stock were authorized for issuance under the Vivint LTIP. There were 12,557,143 and 12,749,736 shares of common stock remaining available for grants under the Vivint LTIP as of December 31, 2024 and 2023, respectively.

Restricted Stock Units

As of December 31, 2024, RSUs under the Vivint LTIP include RSUs which were granted prior to the Acquisition and were converted into awards that vest as NRG common stock ("Rollover RSUs"). These awards typically had four-year graded vesting schedules beginning on the grant date. The fair value of the Rollover RSUs is based on the fair value of NRG common stock on the Acquisition date after applying the conversion ratio as per the Merger Agreement. The RSUs that were granted following the Acquisition date are typically subject to the same terms as the RSUs under the NRG LTIP.

The following table summarizes the non-vested RSUs under the Vivint LTIP and changes during the year:


	Rollover RSUs			RSUs granted following the Acquisition
	Units	Weighted Average Grant Date Fair Value per Unit		Units	Weighted Average Grant Date Fair Value per Unit
Non-vested at December 31, 2023	2,984,901	$	31.63	780,298	$	35.24
Granted following the Acquisition date	—	—		800,032	56.02
Forfeited	(194,314)	31.63		(82,973)	41.38
Vested	(1,440,844)	31.63		(318,774)	39.52

Non-vested at December 31, 2024	1,349,743	31.63		1,178,583	47.19

The total fair value of RSUs vested during the years ended December 31, 2024 and 2023 was $159 million and $66 million, respectively. The weighted average grant date fair value of RSUs granted during the years ended December 31, 2024 and 2023 was $56.02 and $35.24, respectively.

Relative Performance Stock Units

As of December 31, 2024 and 2023, RPSUs granted under the Vivint LTIP are generally granted under the same terms as the RPSUs granted under the NRG LTIP, and are valued using the same methods and assumptions. The following table summarizes the Company's non-vested RPSUs under the Vivint LTIP and changes during the year:


	Units	Weighted Average Grant Date Fair Value per Unit
Non-vested at December 31, 2023	102,837	$	44.96
Granted	71,568	66.44
Forfeited	—	—
Vested	—	—

Non-vested at December 31, 2024	174,405	53.63

There were no RPSUs vested during the year ended December 31, 2024 and 2023. The weighted average grant date fair value of RPSUs granted during the years ended December 31, 2024 and 2023 was $66.44 and $44.96, respectively.

Supplemental Information

The following table summarizes NRG's total compensation expense recognized for the years presented, as well as total non-vested compensation costs not yet recognized and the period over which this expense is expected to be recognized as of December 31, 2024, for each of the types of awards issued under the LTIPs. Minimum tax withholdings of $50 million, $22 million, and $6 million for the years ended December 31, 2024, 2023, and 2022, respectively, are reflected as a reduction to additional paid-in capital on the Company's consolidated balance sheets.


							Non-vested Compensation Cost
(In millions, except weighted average data)	Compensation Expense						Unrecognized Total Cost		Weighted Average Recognition Period Remaining (In years)
	Year Ended December 31,						As of December 31,
Award	2024		2023		2022		2024		2024

RSUs under NRG LTIP	$	29	$	20	$	15	$	17	1.52
RSUs under Vivint LTIP	56		76		—		48		1.32
DSUs	3		2		2		—		0.00

RPSUs under NRG LTIP	11		3		11		15		1.17
RPSUs under Vivint LTIP	3		2		—		5		1.55
PRSUs(a)	43		20		6		68		1.33

Total	$	145	$	123	$	34	$	153
Tax (benefit)/detriment recognized	$	(14)	$	2	$	3

(a)Phantom Restricted Stock Units, PRSUs, are liability-classified time-based awards that typically vest ratably over a three-year period. The amount to be paid upon vesting is based on NRG's closing stock price for the period

Note 21 — Related Party Transactions

NRG provides services to some of its related parties, who are accounted for as equity method investments, under operations and maintenance agreements. Fees for the services under these agreements include recovery of NRG's costs of operating the plants. Certain agreements also include fees for administrative service, a base monthly fee, profit margin and/or annual incentive bonus.

The following table summarizes NRG's material related party transactions with third-party affiliates:


	Year Ended December 31,
(In millions)	2024		2023		2022
Revenues from Related Parties Included in Revenues
Gladstone	$	4	$	4	$	4
Ivanpah(a)	60		78		42
Midway-Sunset	4		2		6
Total	$	68	$	84	$	52

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

Note 22 — Commitments and Contingencies

Commitments

NRG has entered into long-term contractual arrangements related to energy products, including power purchases, gas transportation and storage, fuel and transportation services and generation projects. These contracts are not included in the consolidated balance sheet as of December 31, 2024.

As of December 31, 2024, the Company's minimum commitments under such outstanding agreements are estimated as follows:


Period	(In millions)
2025	$	2,414
2026	2,422
2027	1,392
2028	941
2029	624
Thereafter	1,190
Total(a)	$	8,983

(a)The year 2025 does not include an additional $1.5 billion of short-term commitments. Increase from 2023 is primarily due to NPNS election for certain existing derivative contracts. For further discussion, see Note 6, Accounting for Derivative Instruments and Hedging Activities

The Company's actual costs may be significantly higher than these estimated minimum unconditional long-term firm commitments with remaining term in excess of one year. For the years ended December 31, 2024, 2023 and 2022, the costs of fuel and purchased energy were $12.2 billion, $13.4 billion and $19.6 billion, respectively.

First Lien Structure

NRG has granted first liens to certain counterparties on a substantial portion of property and assets owned by NRG and the guarantors of its senior debt. NRG uses the first lien structure to reduce the amount of cash collateral and letters of credit that it would otherwise be required to post from time to time to support its obligations under out-of-the-money hedges. To the extent that the underlying hedge positions for a counterparty are out-of-the-money to NRG, the counterparty would have a claim under the first lien program. As of December 31, 2024, all hedges under the first liens were in-the-money on a counterparty aggregate basis.

Contingencies

The Company's material legal proceedings are described below. The Company believes that it has valid defenses to these legal proceedings and intends to defend them vigorously. NRG records accruals for estimated losses from contingencies when information available indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. As applicable, the Company has established an adequate accrual for the applicable legal matters, including regulatory and environmental matters as further discussed in Note 23, Regulatory Matters, and Note 24, Environmental Matters. In addition, legal costs are expensed as incurred. Management has assessed each of the following matters based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought, and the probability of success. Unless specified below, the Company is unable to predict the outcome of these legal proceedings or reasonably estimate the scope or amount of any associated costs and potential liabilities. As additional information becomes available, management adjusts its assessment and estimates of such contingencies accordingly. Because litigation is subject to inherent uncertainties and unfavorable rulings or developments, it is possible that the ultimate resolution of the Company's liabilities and contingencies could be at amounts that are different from its currently recorded accruals and that such difference could be material.

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

Environmental Lawsuits

Sierra club et al. v. Midwest Generation LLC — In 2012, several environmental groups filed a complaint against Midwest Generation with the Illinois Pollution Control Board ("IPCB") alleging violations of environmental law resulting in groundwater contamination. In June 2019, the IPCB found in an interim order that Midwest Generation violated the law because it had improperly handled coal ash at four facilities in Illinois and caused or allowed coal ash constituents to impact groundwater. On September 9, 2019, Midwest Generation filed a Motion to Reconsider numerous issues, which the court

granted in part and denied in part on February 6, 2020. In 2023, the IPCB held hearings regarding the appropriate relief. Midwest Generation has been working with the Illinois EPA to address the groundwater issues since 2010.

Consumer Lawsuits

Similar to other energy service companies ("ESCOs") operating in the industry, from time-to-time, the Company and/or its subsidiaries may be subject to consumer lawsuits in various jurisdictions where they sell natural gas and electricity.

Variable Price Case

Mirkin v. XOOM Energy (E.D.N.Y. Aug. 2019) — XOOM Energy is a defendant in a putative class action lawsuit pending in New York, alleging that XOOM Energy promised that consumers would pay the same or less than they would have paid if they stayed with their default utility or previous energy supplier. The Court denied XOOM's motion for summary judgment and granted class certification. The Second Circuit denied XOOM's request to appeal the class certification grants. XOOM prevailed in its challenge to Mirkin's expert reports. The Court granted XOOM's motion to exclude both reports on damages. As a result, Mirkin has no method to establish damages for its class. The Court asked for further briefing on whether class certification can stand in light of the recent ruling. This matter was known and accrued for at the time of the XOOM acquisition.

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

There are two putative class actions pending against Direct Energy: (1) Holly Newman v. Direct Energy, LP (D. Md Sept 2021) - Direct Energy filed its Motion to Dismiss asserting the ruling in the Brittany Burk v. Direct Energy (S.D. Tex. Feb 2019) preempts the Plaintiff's ability to file suit based on the same facts. The Court denied Direct Energy's motion stating the Court does not have the benefit of all of the facts that were in front of the Burk court to issue a similar ruling. On April 12, 2023, the Court granted Direct Energy’s Motion to Transfer Venue, moving to the case to the Southern District of Texas. The parties are proceeding with written discovery; and (2) Matthew Dickson v. Direct Energy (N.D. Ohio Jan. 2018) - The case was stayed pending the outcome of an appeal to the Sixth Circuit based on the unconstitutionality of the TCPA during the period from 2015-2020. The Sixth Circuit found the TCPA was in effect during that period and remanded the case back to the trial court. Direct Energy refiled its motions along with supplements. On March 25, 2022, the Court granted summary judgment in favor of Direct Energy and dismissed the case. Dickson appealed. The Sixth Circuit found that Dickson has standing and reversed the trial court's dismissal of the case. The matter is back at the trial court. The parties conducted fact and expert discovery and Direct Energy submitted its motion for summary judgment in August 2024.

Sales Practice Lawsuit

A Vivint Smart Home competitor has made a claim against Vivint Smart Home alleging, among other things, that Vivint Smart Home's sales representatives used deceptive sales practices. This matter was known and accrued for at the time of the Vivint Smart Home acquisition. CPI Security Systems, Inc. ("CPI") v. Vivint Smart Home, Inc. (W.D.N.C. Sept. 2020) was filed in 2020, went to trial, and in February 2023, the jury issued a verdict against Vivint Smart Home, in favor of CPI for $50 million of compensatory damages and an additional $140 million of punitive damages. Vivint Smart Home has fully briefed the appeal and oral argument was conducted on January 28, 2025. While Vivint Smart Home believes the CPI jury verdict is not legally or factually supported and awaits the issuance of the appellate court’s opinion, there can be no assurance that such defense efforts will be successful. This matter was adequately accrued for as of December 31, 2024.

SB IP Holdings LLC (“Skybell”) v. Vivint Smart Home, Inc. — On October 23, 2023, a jury in the U.S. District Court, Eastern District of Texas, Sherman Division, issued a verdict against the Company in favor of Skybell for $45 million in damages for patent infringement. The patents that were the basis for the claims made by Skybell were ruled invalid by the U.S. International Trade Commission in November 2021. The Company does not believe the verdict is legally supported and is pursuing appellate remedies along with any other legal options available. At the time of the Vivint Smart Home acquisition, this matter was known and accrued for at the amount that was determined to be probable and reasonably estimable.

Contract Dispute

STP — In July 2023, the partners in STP, CPS and Austin Energy, initiated a lawsuit and filed to intervene in the license transfer application with the NRC, claiming a right of first refusal exists in relation to the proposed sale of NRG South Texas' 44% interest in STP to Constellation. The parties entered into a settlement agreement in May 2024, and the litigation was dismissed. There was no incremental impact to NRG as a result of the settlement.

Winter Storm Uri Lawsuits

The Company has been named in certain property damage and wrongful death claims that have been filed in connection with Winter Storm Uri in its capacity as a generator and a REP. Most of the lawsuits related to Winter Storm Uri are consolidated into a single multi-district litigation matter in Harris County District Court. NRG's REPs have since been dismissed from the multi-district litigation. As a power generator, the Company is named in various cases with claims ranging from: wrongful death; personal injury only; property damage and personal injury; property damage only; and subrogation. The First Court of Appeals conditionally granted the generators' mandamus relief, ordering the trial court to grant the generator defendants' Motion to Dismiss. The plaintiffs challenged the ruling and the matters are stayed pending appeals by the various parties. The Company intends to vigorously defend these matters.

Note 23 — Regulatory Matters

Environmental regulatory matters are discussed within Note 24, Environmental Matters.

NRG operates in a highly regulated industry and is subject to regulation by various federal, state and provincial agencies. As such, NRG is affected by regulatory developments at the federal, state and provincial levels and in the regions in which NRG operates. In addition, NRG is subject to the market rules, procedures, and protocols of the various ISO and RTO markets in which NRG participates. These power markets are subject to ongoing legislative and regulatory changes that may impact NRG's wholesale and retail operations.

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

California Station Power — As the result of unfavorable final and non-appealable litigation, the Company accrued a liability associated with consumption of station power at the Company's Encina power plant facility in California after August 30, 2010. The Company has established an appropriate accrual pending potential regulatory action by San Diego Gas & Electric regarding the Company's Encina facility.

Federal Trade Commission Investigation — In 2019, Vivint Smart Home received a civil investigative demand from the staff of the Federal Trade Commission (“FTC”) concerning potential violations of the Fair Credit Reporting Act and the “Red Flags Rule” thereunder, and the FTC Act. In April 2021, Vivint Smart Home entered into a settlement with the FTC that resolved this investigation. As part of this settlement, Vivint Smart Home paid $20 million and agreed to implement various additional compliance related measures ("Stipulated Order"). The Company is engaged in ongoing discussions with the staff of the FTC regarding the Company’s compliance with the terms of the Stipulated Order. Under the terms of the Stipulated Order, Vivint Smart Home is required to undertake biennial assessments by an independent third-party assessor (the "Assessor"), which reviews Vivint Smart Home’s compliance program and provides a report on Vivint Smart Home’s ongoing compliance with the Stipulated Order. Since its inception until December 31, 2023, Vivint Smart Home has completed its initial assessment and its first biennial assessment as required by the Stipulated Order. In addition, Vivint Smart Home has voluntarily undertaken nine quarterly audits by the appointed Assessor. In all the assessments, Vivint Smart Home received a report from the Assessor with no findings of non-compliance of any kind.

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

Note 24 — Environmental Matters

NRG is subject to a wide range of environmental laws in the development, construction, ownership and operation of power plants. These laws generally require that governmental permits and approvals be obtained before construction and maintained during operation of power plants. The electric generation industry has been facing increasingly stringent

requirements regarding air quality, GHG emissions, combustion byproducts, water use and discharge, and threatened and endangered species including four rules promulgated during the second quarter of 2024. In general, future laws are expected to require the addition of emissions controls or other environmental controls or to impose additional restrictions on the operations of the Company's facilities, which could have a material effect on the Company's consolidated financial position, results of operations, or cash flows. The Company has elected to use a $1 million disclosure threshold, as permitted, for environmental proceedings to which the government is a party.

Air

CPP/ACE Rules — The attention in recent years on GHG emissions has resulted in federal and state regulations. In 2019, the EPA promulgated the ACE rule, which rescinded the CPP, which had sought to broadly regulate CO2 emissions from the power sector. The ACE rule required states that have coal-fired EGUs to develop plans to seek heat rate improvements from coal-fired EGUs. On January 19, 2021, the D.C. Circuit vacated the ACE rule (but on February 22, 2021, at the EPA's request, stayed the issuance of the portion of the mandate that would vacate the repeal of the CPP). On June 30, 2022, the U.S. Supreme Court held that the "generation shifting" approach in the CPP exceeded the powers granted to the EPA by Congress. The Court did not address the related issues of whether the EPA may adopt only measures applied at each source. On May 9, 2024, the EPA promulgated a rule that repealed the ACE rule and significantly revised the manner in which new combustion-turbine and existing steam EGU's GHG emissions will be regulated including capturing and storing/sequestering CO2 in some instances. This rule has been challenged by numerous parties in the D.C. Circuit including 27 states with 22 states intervening in support of the rule. The DC Circuit held oral arguments related to this rule in December 2024. On February 5, 2025, the DOJ filed a motion asking the court to hold proceedings in abeyance while the new administration evaluates the rule. The court granted the motion on February 19, 2025.

CSAPR — On March 15, 2023, the EPA signed and released a prepublication version of a final rule that sought to significantly revise the CSAPR to address the good-neighbor obligations of the 2015 ozone NAAQS for 23 states after earlier having disapproved numerous state plans to address the issue. Several states, including Texas, challenged the EPA's disapproval of their state plans. On May 1, 2023, the U.S. Court of Appeals for the Fifth Circuit stayed the EPA's disapproval of Texas' and Louisiana's state plans, which disapprovals are a condition precedent to the EPA imposing its plan on Texas and Louisiana. Several other states are also similarly situated because of similar stays. Nonetheless, on June 5, 2023, the EPA promulgated this rule. On July 31, 2023, the EPA promulgated an interim final rule that addresses the various judicial orders that have stayed several State-Implementation-Plan disapprovals by limiting the effectiveness of certain requirements of the final rule promulgated on June 5, 2023 in Texas and several other states. On June 27, 2024, the U.S. Supreme Court stayed the final rule in the 11 states where the rule had not already been stayed. The Company cannot predict the outcome of the legal challenges to the: (i) various state disapprovals; (ii) the final rule promulgated on June 5, 2023; and (iii) the interim final rule promulgated on July 31, 2023 that seeks to address the judicial orders. The Company anticipates that the new U.S. presidential administration will revisit this rule.

Regional Haze Proposal — In May 2023, the EPA proposed to withdraw the existing Texas Sulfur Dioxide Trading Program and replace it with unit-specific SO2 limits for 12 units in Texas to address requirements to improve visibility at National Parks and Wilderness areas. If finalized as proposed, it would result in more stringent SO2 limits for two of the Company's coal-fired units in Texas. The Company cannot predict the outcome of this proposal.

Mercury and Air Toxics Standards (“MATS”) — On May 7, 2024, the EPA promulgated a final rule that amends the MATS rule by, among other things, increasing the stringency of the filterable particulate matter standard at coal-burning units. The deadline for complying with this more stringent standard is 2027. Twenty-three states have challenged this rule in the D.C. Circuit. Accordingly, the outcome of this rulemaking is uncertain. The Company anticipates that the new U.S. presidential administration will revisit this rule.

Water

ELG — In 2015, the EPA revised the ELG for Steam Electric Generating Facilities, which imposed more stringent requirements (as individual permits were renewed) for wastewater streams from FGD, fly ash, bottom ash and flue gas mercury control. On September 18, 2017, the EPA promulgated a final rule that, among other things, postponed the compliance dates to preserve the status quo for FGD wastewater and bottom ash transport water by two years to November 2020 until the EPA amended the rule. On October 13, 2020, the EPA amended the 2015 ELG rule by: (i) altering the stringency of certain limits for FGD wastewater; (ii) relaxing the zero-discharge requirement for bottom ash transport water; and (iii) changing several deadlines. In 2021, NRG informed its regulators that the Company intends to comply with the ELG by ceasing combustion of coal by the end of 2028 at its domestic coal units outside of Texas, and installing appropriate controls by the end of 2025 at its two plants that have coal-fired units in Texas. On May 9, 2024, the EPA promulgated a rule that revises the ELG by, among other things, further restricting the discharge of (i) FGD wastewater, (ii) bottom ash transport water, and (iii) combustion residual leachate. The rule was challenged in numerous courts, but the cases have been consolidated in the Eighth Circuit of the U.S. Court of Appeals. The outcome of the legal challenges is uncertain. On February 19, 2025, the DOJ filed a motion asking

the court to hold proceedings in abeyance while the new administration evaluates the rule. The Company anticipates that the new U.S. presidential administration will revisit this rule.

Byproducts

In 2015, the EPA finalized the rule regulating byproducts of coal combustion (e.g., ash and gypsum) as solid wastes under the RCRA. On August 21, 2018, the D.C. Circuit found, among other things, that the EPA had not adequately regulated unlined ponds and legacy surface impoundments. On August 28, 2020, the EPA finalized "A Holistic Approach to Close Part A: Deadline to Initiate Closure," which amended the April 2015 Rule to address the August 2018 D.C. Circuit decision and extend some of the deadlines. On November 12, 2020, the EPA finalized "A Holistic Approach to Closure Part B: Alternative Demonstration for Unlined Surface Impoundments," which further amended the April 2015 Rule to, among other things, provide procedures for requesting approval to operate existing ash impoundments with an alternate liner. On May 8, 2024, the EPA promulgated a rule that establishes requirements for: (i) inactive (or legacy) surface impoundments at inactive facilities and (ii) CCR management units (regardless of how or when the CCR was placed) at regulated facilities. The rule also creates an obligation to conduct site assessments (at all active and certain inactive facilities) to determine whether CCR management units are present. The rule has been challenged in the D.C. Circuit and the outcome of the legal challenges is uncertain. The Company anticipates that the new U.S. presidential administration will revisit this rule.

Note 25 — Cash Flow Information

Detail of supplemental disclosures of cash flow and non-cash investing and financing information was:


	Year Ended December 31,
(In millions)	2024		2023		2022
Interest paid, net of amount capitalized	$	626	$	548	$	383
Income taxes paid, net of refunds	182		48		66
Non-cash investing and financing activities:
Decreases to fixed assets for accrued capital expenditures	(76)		—		(68)
Excise tax accrued on share repurchases	9		10		—

Note 26 — Guarantees

NRG and its subsidiaries enter into various contracts that include indemnification and guarantee provisions as a routine part of the Company's business activities. Examples of these contracts include asset purchases and sale agreements, commodity sale and purchase agreements, retail contracts, joint venture agreements, EPC agreements, operation and maintenance agreements, service agreements, settlement agreements, and other types of contractual agreements with vendors and other third parties, as well as affiliates. These contracts generally indemnify the counterparty for tax, environmental liability, litigation and other matters, as well as breaches of representations, warranties and covenants set forth in these agreements. The Company is obligated with respect to customer deposits associated with the Company's retail operations. In some cases, NRG's maximum potential liability cannot be estimated, since the underlying agreements contain no limits on potential liability.

The following table summarizes the maximum potential exposures that can be estimated for NRG's guarantees, indemnities, and other contingent liabilities by maturity:


	By Remaining Maturity at December 31,
(In millions)	2024
Guarantees	Under 1 Year		1-3 Years		3-5 Years		Over 5 Years		Total		2023 Total
Letters of credit and surety bonds	$	3,996	$	181	$	11	$	—	$	4,188	$	4,592
Asset sales guarantee obligations	11		20		18		53		102		126
Other guarantees	—		—		—		27		27		27
Total guarantees	$	4,007	$	201	$	29	$	80	$	4,317	$	4,745

Letters of credit and surety bonds — As of December 31, 2024, NRG and its consolidated subsidiaries were contingently obligated for a total of $4.2 billion under letters of credit and surety bonds. Most of these letters of credit and surety bonds are issued in support of the Company's obligations to perform under commodity agreements and obligations associated with future closure and maintenance of ash sites, as well as for financing or other arrangements. A majority of these letters of credit and surety bonds expire within one year of issuance, and it is typical for the Company to renew them on similar terms.

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

Asset sales — The purchase and sale agreements which govern NRG's asset or share investments and divestitures customarily contain guarantees and indemnifications of the transaction to third parties. The contracts indemnify the parties for liabilities incurred as a result of a breach of a representation or warranty by the indemnifying party, changes in tax laws or for pre-existing environmental matters. These obligations generally have a discrete term and are intended to protect the parties against risks that are difficult to predict or estimate at the time of the transaction. In several cases, the contract limits the liability of the indemnifier. NRG has no reason to believe that the Company currently has any material liability relating to such routine indemnification obligations included in the table above, except for the California property tax indemnity for estimated increases in California property taxes of certain solar properties that the Company agreed to indemnify, as part of the agreement to sell NRG Yield and the Renewables Platform. The California property tax indemnity is estimated to be $102 million as of December 31, 2024 and is included in the above table under asset sales guarantee obligations.

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

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

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

Note 27 — Jointly Owned Plant

NRG owns an undivided interest in Cedar Bayou. Cedar Bayou is maintained and operated pursuant to its joint ownership participation and operating agreement. NRG is responsible for its subsidiary’s share of operating costs and direct expenses and includes its proportionate share of the facility and related revenues and direct expenses in the jointly-owned plant in the corresponding balance sheet and income statement captions of the Company's consolidated financial statements.

The following table summarizes NRG's proportionate ownership interest in the Company's jointly-owned facility:


(In millions unless otherwise stated)
As of December 31, 2024	Ownership Interest		Property, Plant & Equipment		Accumulated Depreciation		Construction in Progress

Cedar Bayou Unit 4, Baytown, TX	50.00	%	$	222	$	(125)	$	5

Note 28 — Balance Sheet Components

The components of accrued expenses and other current liabilities are as follows:


	Year Ended December 31,
(In millions)	2024		2023
Accrued RECs	$	477	$	435
Accrued compensation and employee benefits	514		452
Other	1,040		755
Total accrued expenses and other current liabilities	$	2,031	$	1,642

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended December 31, 2024, 2023 and 2022


(In millions)	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts		Deductions			Balance at End of Period
Allowance for credit losses, deducted from accounts receivable and other non-current assets
Year Ended December 31, 2024	$	145	$	314	$	18	$	(325)	(a)	$	152
Year Ended December 31, 2023	133		251		35		(274)		(a)	145
Year Ended December 31, 2022	683		11		—		(561)		(a)	133
Income tax valuation allowance, deducted from deferred tax assets
Year Ended December 31, 2024	$	275	$	(131)	$	—	$	—		$	144
Year Ended December 31, 2023	224		42		9		—			275
Year Ended December 31, 2022	248		(20)		(4)		—			224

(a)Represents principally net amounts charged as uncollectible

EXHIBIT INDEX


Number	Description	Method of Filing
2.1	Third Amended Joint Plan of Reorganization of GenOn Energy, Inc. and its Debtor Affiliates.	Incorporated herein by reference to Exhibit 2.1 to the Registrant's current report on Form 8-K filed on December 18, 2017.
2.2†^	Purchase and Sale Agreement, dated as of February 6, 2018, by and among NRG Energy, Inc. and NRG Repowering Holdings LLC, and GIP III Zephyr Acquisition Partners, L.P.	Incorporated herein by reference to Exhibit 2.9 to the Registrant's annual report on Form 10-K filed on March 1, 2018.
2.3^	Purchase and Sale Agreement, dated as of February 6, 2018, by and between NRG Energy, Inc., NRG South Central Generating LLC, and Cleco Energy LLC.	Incorporated herein by reference to Exhibit 2.10 to the Registrant's annual report on Form 10-K filed on March 1, 2018.
2.4‡	Purchase and Sale Agreement dated as of February 28, 2021 by and between NRG Energy, Inc., and Generation Bridge Acquisition, LLC, as a Purchaser	Incorporated herein by reference to Exhibit 2.1 to the Registrant's quarterly report on Form 10-Q filed on May 6, 2021.
2.5^	Agreement and Plan of Merger dated as of December 6, 2022, by and among the Company, Merger Sub and Vivint.	Incorporated herein by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed on December 6, 2022.
2.6	Equity Purchase Agreement, dated May 31, 2023 by and among Constellation Energy Generation, LLC, as Buyer and Texas Genco GP, LLC, Texas Genco LP, LLC, together, Seller.	Incorporated herein by reference to Exhibit 2.1 to the Registrant's current report on Form 8-K filed on June 1, 2023.
2.7	Amendment No.1 to Equity Purchase Agreement dated September 29, 2023 by and among Constellation Energy Generation, LLC. as Buyer and Texas Genco GP, LLC, together, Seller	Incorporated herein by reference to Exhibit 2.7 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
2.8	Amendment No. 2 to Equity Purchase Agreement dated November 1, 2023 by and among Constellation Energy Generation, LLC. as Buyer and Texas Genco GP, LLC, together, Seller	Incorporated herein by reference to Exhibit 2.8 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
2.9	Amendment No. 3 to Equity Purchase Agreement dated November 1, 2023 by and among Constellation Energy Generation, LLC. as Buyer and Texas Genco GP, LLC, together, Seller	Incorporated herein by reference to Exhibit 2.9 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
3.1	Amended and Restated Certificate of Incorporation.	Incorporated herein by reference to Exhibit 3.1 to the Registrant's quarterly report on Form 10-Q filed on May 3, 2012.
3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation.	Incorporated herein by reference to Exhibit 3.1 to the Registrant's current report on Form 8-K filed on December 14, 2012.
3.3	Sixth Amended and Restated By-Laws.	Incorporated herein by reference to Exhibit 3.2 to the Registrant's current report on Form 8-K filed on December 2, 2022.
3.4	Series A Preferred Stock Certificate of Designation filed with the Secretary of the State of Delaware on March 9, 2023.	Incorporated herein by reference to Exhibit 3.1 to the Registrant's current report on Form 8-K filed on March 10, 2023.
4.1	Specimen of Certificate representing common stock of NRG Energy, Inc.	Incorporated herein by reference to Exhibit 4.3 to the Registrant's quarterly report on Form 10-Q filed on August 4, 2006.
4.2	Indenture, dated May 24, 2018, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form of 2.750% Convertible Senior Notes due 2048.	Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on May 25, 2018.
4.3	Supplemental Indenture (Settlement Elections - 2.750% Convertible Senior Notes due 2048) dated February 22, 2022, among NRG Energy, Inc., each of its guarantor subsidiaries, and Delaware Trust Company as trustee.	Incorporated herein by reference to Exhibit 4.52 to the Registrant's annual report on Form 10-K filed on February 24, 2022.
4.4	Base Indenture, dated May 23, 2016, between NRG Energy, Inc. and Delaware Trust Company (as successor in interest to Law Debenture Trust Company of New York), as trustee.	Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on May 23, 2016.
4.5	Fourth Supplemental Indenture, dated December 7, 2017, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form of 5.750% Senior Notes due 2028.	Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on December 8, 2017.


4.6	Fifth Supplemental Indenture, dated May 14, 2019, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form of 5.250% Senior Notes due 2029.	Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on May 16, 2019.
4.7	Base Indenture, dated December 2, 2020, between NRG Energy, Inc. and Deutsche Bank Trust Company Americas, as trustee, pertaining to the Secured Notes.	Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.
4.8	Supplemental Indenture, dated December 2, 2020, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 3.375% Senior Notes due 2029 and Form of 3.625% Senior Notes due 2031.	Incorporated herein by reference to Exhibit 4.6 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.
4.9	Second Supplemental Indenture, dated August 23, 2021, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 3.875% Senior Notes due 2032.	Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on August 23, 2021.
4.10	Base Indenture, dated October 30, 2024, between NRG Energy, Inc. and Deutsche Bank Trust Company Americas, as trustee, pertaining to the Notes.	Incorporated herein by reference to Exhibit 4.1 to the Registrant's current report on Form 8-K filed on November 1, 2024.
4.11	Supplemental Indenture, dated October 30, 2024, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form 5.75% Senior Note due 2029, Form of 6.00% Senior Notes due 2033 and Form of 6.25% Senior Notes due 2034.	Incorporated herein by reference to Exhibit 4.2 to the Registrant's current report on Form 8-K filed on November 1, 2024.
4.12	Base Indenture, dated May 28, 2019, between NRG Energy, Inc. and Delaware Trust Company, as trustee	Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on May 30, 2019.
4.13	Supplemental Indenture, dated May 28, 2019, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form 3.750% Senior Secured First Lien Notes due 2024 and Form of 4.450% Senior Secured First Lien Notes due 2029	Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on May 30, 2019.
4.14	Base Indenture, dated December 2, 2020, between NRG Energy, Inc. and Deutsche Bank Trust Company Americas, as trustee, pertaining to the Un s ecured Notes.	Incorporated herein by reference to Exhibit 4.5 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.
4.15	Supplemental Indenture, dated December 2, 2020, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 2.000% Senior Secured First Lien Notes due 2025 and Form of 2.450% Senior Secured First Lien Notes due 2027	Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.
4.16	Supplemental Indenture, dated March 9, 2023, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 7.000% Senior Secured First Lien Notes Due 2033	Incorporated herein by reference to Exhibit 4.2 to the Registrant's current report on Form 8-K filed on March 10, 2023.
4.17	Base Indenture, dated August 29, 2023, between NRG Energy, Inc. and Deutsche Bank Trust Company Americas, as trustee, pertaining to the Alexander Funding Trust II Pre-Capitalized Trust Securities.	Incorporated herein by reference to Exhibit 4.4 to the Registrant's current report on Form 8-K filed on August 29, 2023.
4.18	Supplemental Indenture, dated August 29, 2023, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form 7.467% Senior Secured First Lien Notes due 2028.	Incorporated herein by reference to Exhibit 4.5 to the Registrant's current report on Form 8-K filed on August 29, 2023.
4.19	Description of NRG Energy, Inc. securities registered pursuant to section 12 of the Securities Exchange Act of 1934	Incorporated herein by reference to Exhibit 4.15 to the Registrant's Annual Report on Form 10-K, filed on February 27, 2020.
10.1*	The NRG Energy, Inc. Amended and Restated Long-Term Incentive Plan	Incorporated herein by reference to Exhibit 10.3 to the Registrant's quarterly report on Form 10-Q filed on August 8, 2024.
10.2*	Form of NRG Energy, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement.	Incorporated herein by reference to Exhibit 10.24 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
10.3*	Form of NRG Energy, Inc. Long-Term Incentive Plan Deferred Stock Unit Agreement for Directors.	Incorporated herein by reference to Exhibit 10.15 to the Registrant's annual report on Form 10-K filed on March 30, 2005.


10.4*	Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Officers.	Incorporated herein by reference to Exhibit 10.73 to the Registrant's annual report on Form 10-K filed on March 1, 2018.
10.5*	Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Senior Vice Presidents.	Incorporated herein by reference to Exhibit 10.74 to the Registrant's annual report on Form 10-K filed on March 1, 2018.
10.6*	Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Executive Vice Presidents	Incorporated herein by reference to Exhibit 10.22 to the Registrant's annual report on Form 10-K filed on February 24, 2022.
10.7*	Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Senior Vice Presidents.	Incorporated herein by reference to Exhibit 10.23 to the Registrant's annual report on Form 10-K filed on February 24, 2022.
10.8*	Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Senior Vice Presidents.	Incorporated herein by reference to Exhibit 10.23 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
10.9*	Restricted Stock Unit Agreement, dated December 15, 2023, between NRG Energy, Inc. and Lawrence S. Coben	Incorporated herein by reference to Exhibit 10.25 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
10.10*	Relative Performance Stock Unit Agreement, dated August 1, 2024, between NRG Energy, Inc. and Lawrence S. Coben	Filed herewith
10.11*	Form of NRG Energy, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement for Chief Executive Officer	Filed herewith
10.12*	Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Chief Executive Officer	Filed herewith
10.13*	NRG Energy, Inc., 2020 Omnibus Incentive Plan (Legacy Vivint) (formerly known as the Vivint Smart Home, Inc. Long-Term Incentive Plan)	Incorporated herein by reference to Exhibit 4.4 to Vivint Smart Home's Post-Effective Amendment on Form S-8 to Registration Statement on Form S-4 filed with the Securities and Exchange Commission on March 24, 2020
10.14*	Amendment to NRG Energy, Inc. 2020 Omnibus Incentive Plan (Legacy Vivint)	Incorporated herein by reference to Exhibit 10.1 to the Registrant's quarterly report on Form 10-Q filed on August 8, 2023.
10.15*	Second Amendment to NRG Energy, Inc. 2020 Omnibus Incentive Plan (Legacy Vivint)	Filed herewith.
10.16*	Form of NRG Inc. , 2020 Omnibus Incentive Plan (Legacy Vivint) Relative Performance Stock Unit Agreement and Notice of Grant	Incorporated herein by reference to Exhibit 10.2 to the Registrant's quarterly report on Form 10-Q filed on May 4, 2023.
10.17*	Form of NRG Energy Inc., 2020 Omnibus Incentive Plan (Legacy Vivint) Restricted Stock Unit Agreement and Notice of Grant	Incorporated herein by reference to Exhibit 10.3 to the Registrant's quarterly report on Form 10-Q filed on May 4, 2023.
10.18*	Form of NRG Energy Inc., 2020 Omnibus Incentive Plan (Legacy Vivint) Relative Performance Stock Unit Agreement and Notice of Grant	Incorporated herein by reference to Exhibit 10.29 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
10.19*	Form of NRG Energy Inc., 2020 Omnibus Incentive Plan (Legacy Vivint) Restricted Stock Unit Agreement and Notice of Grant	Incorporated herein by reference to Exhibit 10.30 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
10.20*	Second Amended and Restated Annual Incentive Plan for Designated Corporate Officers.	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on May 7, 2015.
10.21*	NRG Energy, Inc. Amended and Restated Executive Change-in-Control and General Severance Plan for Tier IA and Tier IIA Executives (Amended and Restated Effective January 1, 2024).	Incorporated herein by reference to Exhibit 10.10 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
10.22*	Amended and Restated Employee Stock Purchase Plan	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on May 2, 2023.
10.23*	Retention letter, dated December 6, 2022, between Vivint Smart Home, Inc. and Rasesh Patel.	Incorporated herein by reference to Exhibit 10.45 to Vivint Smart Home, Inc.'s Annual Report on Form 10-K for the annual period ended December 31, 2022.
10.24*	Amended and Restated Employment Agreement, dated June 20, 2022, between Vivint Smart Home, Inc. and Rasesh Patel	Incorporated by reference to Exhibit 10.5 to Vivint Smart Home, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022


10.25*	Employment Agreement, dated August 1, 2024 by and between NRG Energy, Inc. and Lawrence S. Coben	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on August 1, 2024.
10.26	Second Amended and Restated Credit Agreement, dated as of July 9, 2021, among APX Group Holdings, Inc., as Holdings, APX Group, Inc., as the borrower, the guarantors party hereto from time to time, Bank of America, N.A., as administrative agent, swing line lender and an L/C issuer.	Incorporated herein by reference to Exhibit 10.2 to Vivint Smart Home, Inc.'s Current Report on Form 8-K filed on July 12, 2021.
10.27	Amendment No.1 to the Second Amended and Restated Credit Agreement, dated as of June 9, 2023, by and between AXP Group, Inc. as borrower and the Bank of America, N.A., as administrative agent.	Incorporated herein by reference to Exhibit 4.1 to the Registrant's quarterly report on Form 10-Q filed on August 8, 2023.
10.28	Amendment No. 2 to the Second Amended and Restated Credit Agreement, dated as of April 10, 2024, by and between, among others, APX Group, Inc., as borrower, Bank of America, N.A., as administrative agent and certain financial institutions, as lenders.	Incorporated herein by reference to Exhibit 10.3 to the Registrant's quarterly report on Form 10-Q filed on May 7, 2024.
10.29	Sixth Amendment to Second Amended and Restated Credit Agreement, dated as of February 14, 2023, by and among NRG Energy, Inc., its subsidiaries party thereto, the lenders and issuing banks party thereto, Citicorp North America, Inc., as administrative agent and collateral agent, and Deutsche Bank Trust Company Americas, as collateral trustee, and included as Exhibit A-2 thereto a clean conformed copy of the Second Amended and Restated Credit Agreement	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on February 15, 2023.
10.30	Seventh Amendment to Second Amended and Restated Credit Agreement, dated as of March 13, 2023, by and among NRG Energy, Inc., its subsidiaries party thereto, the lenders and issuing banks party thereto, Citicorp North America, Inc., as administrative agent and collateral agent, and Deutsche Bank Trust Company Americas, as collateral trustee.	Incorporated herein by reference to Exhibit 4.2 to the Registrant's quarterly report on Form 10-Q filed on May 4, 2023.
10.31	Eighth Amendment to Second Amended and Restated Credit Agreement, dated as of April 16, 2024, by and among NRG Energy, Inc., its subsidiaries party thereto, Citicorp North America, Inc., as administrative agent and as collateral agent, and certain financial institutions, as lenders.	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on April 17, 2024.
10.32	Ninth Amendment to Second Amended and Restated Credit Agreement, dated as of April 22, 2024, by and among NRG Energy, Inc., its subsidiaries party thereto, the consenting revolving lender party thereto, and Citicorp North America, Inc., as administrative agent and collateral agent.	Incorporated herein by reference to Exhibit 10.2 to the Registrant's quarterly report on Form 10-Q filed on May 7, 2024.
10.33	Tenth Amendment to Second Amended and Restated Credit Agreement, dated as of October 30, 2024, by and among NRG Energy, Inc., Citicorp North America, Inc., as administrative agent and as collateral agent, and certain financial institutions, as lenders.	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on November 1, 2024.
10.34	Eleventh Amendment to Second Amended and Restated Credit Agreement, dated as of October 30, 2024, by and among NRG Energy, Inc., Citicorp North America, Inc., as administrative agent and as collateral agent, and certain financial institutions, as lenders.	Incorporated herein by reference to Exhibit 10.2 to the Registrant's current report on Form 8-K filed on November 1, 2024.
10.35	Thirteen Amendment to Second Amended and Restated Credit Agreement, dated as of December 20, 2024, by and among NRG Energy, Inc., AXP Group and Citicorp North America, Inc., as administrative agent.	Filed herewith.
10.36	Receivables Sale Agreement, dated as of September 22, 2020, among the Originators from time to time parties thereto, NRG Retail LLC, as Servicer, and NRG Receivables LLC.	Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 22, 2020.
10.37	Amendment No. 3 to Receivables Loan and Servicing Agreement, dated as of June 22, 2023, among NRG Retail LLC, as Servicer, NRG Receivables LLC, as Borrower, NRG Energy, Inc., as Performance Guarantor, the Conduit Lenders, Committed Lenders, Facility Agents and LC Issuers party thereto, and Royal Bank of Canada, as administrative Agent, and included as Exhibit A-2 thereto a clean, conformed copy of the Receivables Loan and Servicing Agreement.	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on June 27, 2023.


10.38	Amendment No. 4 to Receivables Loan and Servicing Agreement, dated as of June 21, 2024, among NRG Retail LLC, as Servicer, NRG Receivables LLC, as Borrower, NRG Energy, Inc., as Performance Guarantor, the Conduit Lenders, Committed Lenders, Facility Agents and LC Issuers party thereto, and Royal Bank of Canada, as administrative Agent, and included as Exhibit A-2 thereto a clean, conformed copy of the Receivables Loan and Servicing Agreement.	Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on June 24, 2024.
10.39	Joinder Agreement, dated as of June 21, 2024, by Direct Energy Services, LLC, as an additional originator and consented to by NRG Receivables LLC, as Borrower, NRG Retail LLC, as Servicer, and Royal Bank of Canada, as administrative agent, to the Receivables Sale Agreement, dated as of September 22, 2020, among the Originators from time to time parties thereto, NRG Retail LLC, as Servicer, and NRG Receivables LLC.	Incorporated herein by reference to Exhibit 10.2 to the Registrant's current report on Form 8-K filed on June 24, 2024.
10.40	Facility Agreement, dated August 29, 2023, among NRG Energy, Inc., the guarantors party thereto, Alexander Funding Trust II and Deutsche Bank Trust Company Americas, as the notes trustee	Incorporated herein by reference to Exhibit 4.1 to the Registrant's current report on Form 8-K filed on August 29, 2023.
10.41	Letter of Credit Facility Agreement, dated August 29, 2023, among NRG Energy, Inc., the financial institutions from time to time party thereto as letter of credit issuers, and Deutsche Bank Trust Company Americas, as administrative agent and as collateral agent	Incorporated herein by reference to Exhibit 4.2 to the Registrant's current report on Form 8-K filed on August 29, 2023.
10.42	Amended and Restated Declaration of Trust of Alexander Funding Trust II, dated August 29, 2023, among NRG Energy, Inc. as depositor and in its own capacity, Deutsche Bank Trust Company Americas, as trustee, and Deutsche Bank Trust Company Delaware, as Delaware trustee	Incorporated herein by reference to Exhibit 4.3 to the Registrant's current report on Form 8-K filed on August 29, 2023.
10.43	Cooperation Agreement, dated as of November 20, 2023, by and among NRG Energy, Inc., Elliott Investment Management L.P., Elliott Associates, L.P., and Elliott International, L.P.	Incorporated herein by reference to Exhibit 10.1 to the Registrant’s current report on Form 8-K filed on November 20, 2023
10.44†	Consent and Indemnity Agreement, dated as of February 6, 2018, by and among NRG Energy, Inc., NRG Repowering Holdings LLC, NRG Yield, Inc., and GIP III Zephyr Acquisition Partners, L.P., and NRG Yield Operating LLC (solely with respect to Sections E.5, E.6 and G.12).	Incorporated herein by reference to Exhibit 10.34 to NRG Yield, Inc.'s Annual Report on Form 10-K filed on March 1, 2018.
19.1	Insider Trading Policy	Filed herewith.
21.1	Subsidiaries of NRG Energy, Inc.	Filed herewith.
22.1	List of Guarantor Subsidiaries	Filed herewith.
23.1	Consent of KPMG LLP.	Filed herewith.
24.1	Power of Attorney	Included on signature page
31.1	Rule 13a-14(a)/15d-14(a) certification of Lawrence Coben	Filed herewith.
31.2	Rule 13a-14(a)/15d-14(a) certification of Woo-Sung Chung	Filed herewith.
31.3	Rule 13a-14(a)/15d-14(a) certification of G. Alfred Spencer	Filed herewith.
32	Section 1350 Certification.	Furnished herewith.
97	NRG Energy, Inc. Clawback Policy	Incorporated herein by reference to Exhibit 97 to the Registrant's annual report on Form 10-K filed on February 28, 2024.
101 INS	Inline XBRL Instance Document.	The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101 SCH	Inline XBRL Taxonomy Extension Schema.	Filed herewith.
101 CAL	Inline XBRL Taxonomy Extension Calculation Linkbase.	Filed herewith.
101 DEF	Inline XBRL Taxonomy Extension Definition Linkbase.	Filed herewith.
101 LAB	Inline XBRL Taxonomy Extension Label Linkbase.	Filed herewith.
101 PRE	Inline XBRL Taxonomy Extension Presentation Linkbase.	Filed herewith.
104	Cover Page Interactive Data File (the cover page interactive data file does not appear in Exhibit 104 because it's Inline XBRL tags are embedded within the Inline XBRL document).	Filed herewith.


*						Exhibit relates to compensation arrangements.
†						Portions of this exhibit have been redacted and are subject to a confidential treatment request filed with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
^						This filing excludes schedules pursuant to Item 601(b)(2) of Regulation S-K, which the registrant agrees to furnish supplementary to the Securities and Exchange Commission upon request by the Commission.
‡						Portions of this exhibit have been excluded because they are both not material and would likely cause competitive harm to the registrant if publicly disclosed. Information that has been omitted has been noted in this document with a placeholder identified by the mark “[***]”.

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