Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

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Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
(In millions, except per share amounts)	2026		2025		2026		2025
Revenue
Revenue	$	7,481	$	6,740	$	17,737	$	15,325
Operating Costs and Expenses
Cost of operations (excluding depreciation and amortization shown below)	5,470		5,629		14,328		12,190
Depreciation and amortization	494		344		926		670

Selling, general and administrative costs (excluding amortization of customer acquisition costs of $93, $68, $180, and $133 respectively, which are included in depreciation and amortization shown separately above)	562		724		1,155		1,273

Acquisition-related transaction and integration costs	16		43		61		51
Total operating costs and expenses	6,542		6,740		16,470		14,184

Gain/(Loss) on sale of assets	37		—		37		(7)
Operating Income	976		—		1,304		1,134
Other Income/(Expense)


Other income, net	6		5		46		19
Loss on debt extinguishment	(9)		(10)		(9)		(10)
Interest expense	(310)		(148)		(595)		(311)
Total other expense	(313)		(153)		(558)		(302)
Income/(Loss) Before Income Taxes	663		(153)		746		832
Income tax expense/(benefit)	157		(49)		115		186


Net Income/(Loss)	$	506	$	(104)	$	631	$	646
Less: Cumulative dividends attributable to Series A Preferred Stock	17		17		34		34
Net Income/(Loss) Available for Common Stockholders	$	489	$	(121)	$	597	$	612
Income/(Loss) per Share
Weighted average number of common shares outstanding — basic	211		196		209		197


Income/(Loss) per Weighted Average Common Share — Basic	$	2.32	$	(0.62)	$	2.86	$	3.11
Weighted average number of common shares outstanding — diluted	212		196		210		203


Income/(Loss) per Weighted Average Common Share — Diluted	$	2.31	$	(0.62)	$	2.84	$	3.01

See accompanying notes to condensed consolidated financial statements.

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
(In millions)	2026		2025		2026		2025
Net Income/(Loss)	$	506	$	(104)	$	631	$	646
Other Comprehensive (Loss)/Income

Foreign currency translation adjustments	(3)		13		(4)		15

Defined benefit plans	—		1		(2)		1
Other comprehensive (loss)/income	(3)		14		(6)		16
Comprehensive Income/(Loss)	$	503	$	(90)	$	625	$	662

See accompanying notes to condensed consolidated financial statements.

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2026		December 31, 2025
(In millions, except share data)	(Unaudited)		(Audited)
ASSETS
Current Assets
Cash and cash equivalents	$	162	$	4,708
Funds deposited by counterparties	167		260
Restricted cash	50		30
Accounts receivable, net	3,534		4,065

Inventory	793		461
Derivative instruments	3,188		2,189
Cash collateral paid in support of energy risk management activities	441		365

Prepayments and other current assets	1,318		1,069


Total current assets	9,653		13,147
Property, plant and equipment, net	14,076		3,632
Other Assets


Operating lease right-of-use assets, net	142		130
Goodwill	8,815		5,017
Customer relationships, net	1,177		1,203
Other intangible assets, net	963		1,106

Derivative instruments	1,617		1,568
Deferred income taxes	1,725		1,843
Other non-current assets	1,772		1,494


Total other assets	16,211		12,361
Total Assets	$	39,940	$	29,140


	June 30, 2026		December 31, 2025
(In millions, except share data)	(Unaudited)		(Audited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities

Current portion of long-term debt and finance leases	$	1,512	$	31

Current portion of operating lease liabilities	41		35
Accounts payable	2,579		2,834

Derivative instruments	3,120		2,257
Cash collateral received in support of energy risk management activities	167		260
Deferred revenue current	837		748
Accrued expenses and other current liabilities	1,719		1,864



Total current liabilities	9,975		8,029
Other Liabilities
Long-term debt and finance leases	21,744		16,412
Non-current operating lease liabilities	170		144



Derivative instruments	1,327		1,103
Deferred income taxes	15		15
Deferred revenue non-current	984		895
Other non-current liabilities	870		861


Total other liabilities	25,110		19,430
Total Liabilities	35,085		27,459

Commitments and Contingencies
Stockholders’ Equity
Preferred stock; 10,000,000 shares authorized; 650,000 Series A shares issued and outstanding at June 30, 2026 and December 31, 2025, aggregate liquidation preference of $650 at June 30, 2026 and December 31, 2025	650		650
Common stock; $0.01 par value; 500,000,000 shares authorized; 225,198,900 and 199,828,615 shares issued and 210,307,902 and 190,376,607 shares outstanding at June 30, 2026 and December 31, 2025, respectively	2		2
Additional paid-in-capital	3,880		215
Retained earnings	2,374		1,982
Treasury stock, at cost; 14,890,998 shares and 9,452,008 shares at June 30, 2026 and December 31, 2025, respectively	(1,964)		(1,087)
Accumulated other comprehensive loss	(87)		(81)

Total Stockholders’ Equity	4,855		1,681
Total Liabilities and Stockholders’ Equity	$	39,940	$	29,140

See accompanying notes to condensed consolidated financial statements.

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended June 30,
(In millions)	2026		2025
Cash Flows from Operating Activities
Net income	$	631	$	646


Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property, plant and equipment and amortization of customer relationships and other intangible assets	602		444
Amortization of capitalized contract costs	324		226
Accretion of asset retirement obligations	17		20
Provision for credit losses	104		113

Amortization of financing costs and debt discounts/premiums	10		13
Loss on debt extinguishment	9		10
Amortization of in-the-money contracts and emissions allowances	47		51
Amortization of unearned equity compensation	72		62
Net (gain)/loss on sale of assets and disposal of assets	(38)		10
Gain on proceeds from insurance recoveries for Property, plant and equipment, net	—		(100)


Changes in derivative instruments	(61)		18
Changes in current and deferred income taxes and liability for uncertain tax benefits	(33)		126
Changes in collateral deposits in support of risk management activities	14		197




Changes in other working capital:
Accounts receivable, net	910		(17)
Inventory	(156)		16
Prepayments and other current assets	(441)		(368)
Accounts payable	(780)		(39)
Accrued expenses and other current liabilities	(164)		(120)
Other assets and liabilities	(119)		(2)
Cash provided by operating activities	$	948	$	1,306


Cash Flows from Investing Activities
Payments for acquisitions of businesses and assets, net of cash acquired	$	(7,101)	$	(586)
Capital expenditures	(655)		(595)

Proceeds from sales of assets, net	44		6
Purchases of emissions allowances	(41)		(10)
Sales of emissions allowances	44		3


Proceeds from insurance recoveries for Property, plant and equipment, net	—		100



Cash used in investing activities	$	(7,709)	$	(1,082)



Cash Flows from Financing Activities

Equivalent shares purchased in lieu of tax withholdings	$	(99)	$	(77)
Payments for share repurchase activity and excise tax	(931)		(603)

Payments of dividends to preferred and common stockholders	(235)		(207)

Proceeds from issuance of long-term debt	3,652		—
Repayments of long-term debt and finance leases	(1,619)		(10)
Payments for debt extinguishment costs	(9)		—
Payments of deferred financing costs	(84)		(31)
Net receipts from settlement of acquired derivatives that include financing elements	16		38



Proceeds from credit facilities	8,675		865
Repayments to credit facilities	(7,226)		(730)
Cash provided by/(used in) financing activities	$	2,140	$	(755)


Effect of exchange rate changes on cash and cash equivalents	2		1

Net Decrease in Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash	(4,619)		(530)
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at Beginning of Period	4,998		1,173
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at End of Period	$	379	$	643

See accompanying notes to condensed consolidated financial statements.

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


(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, 2025	$	650	$	2	$	215	$	1,982	$	(1,087)	$	(81)	$	1,681
Net income							125						125

Other comprehensive loss											(3)		(3)


Share repurchases(a)									(484)				(484)
Retirement of treasury stock(b)					(40)				40				—
Equity-based awards activity, net(c)					(35)								(35)
Issuance of common stock for acquisition of LSP Portfolio(d)					3,728								3,728
Common stock dividends and dividend equivalents declared(e)							(105)						(105)


Series A Preferred Stock dividends(f)							(33)						(33)


Balance at March 31, 2026	$	650	$	2	$	3,868	$	1,969	$	(1,531)	$	(84)	$	4,874
Net income							506						506
Other comprehensive loss											(3)		(3)
Shares reissuance for ESPP									11				11
Share repurchases(a)									(444)				(444)

Equity-based awards activity, net(c)					12								12

Common stock dividends and dividend equivalents declared(e)							(101)						(101)

Balance at June 30, 2026	$	650	$	2	$	3,880	$	2,374	$	(1,964)	$	(87)	$	4,855

(a)Includes excise tax accrued of $4 million and $3 million for the quarters ended June 30 and March 31, 2026, respectively

(b)For further discussion of the treasury stock retirements, see Note 9, Changes in Capital Structure

(c)Includes $(20) million and $(79) million of equivalent shares purchased in lieu of tax withholding on equity compensation issuances for the quarters ended June 30 and March 31, 2026, respectively

(d)For further discussion of the LSP Portfolio acquisition, see Note 4, Acquisitions

(e)Dividends per common share were $0.475 for each of the quarters ended June 30 and March 31, 2026

(f)Semi-annual dividends per share of Series A Preferred Stock were $51.25 for the period ended March 15, 2026


(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, 2024	$	650	$	2	$	705	$	1,535	$	(297)	$	(117)	$	2,478
Net income							750						750

Other comprehensive income											2		2

Share repurchases(g)									(322)				(322)
Retirement of treasury stock(h)					(179)				179				—
Equity-based awards activity, net(i)					(8)								(8)

Common stock dividends and dividend equivalents declared(j)							(90)						(90)
Series A Preferred Stock dividends(k)							(33)						(33)

Balance at March 31, 2025	$	650	$	2	$	518	$	2,162	$	(440)	$	(115)	$	2,777
Net loss							(104)						(104)

Other comprehensive income											14		14
Shares reissuance for ESPP					2				6				8
Share repurchases(g)									(282)				(282)
Retirement of treasury stock(h)					(178)				178				—
Equity-based awards activity, net(i)					(3)								(3)

Common stock dividends and dividend equivalents declared(j)							(88)						(88)





Capped Call Options(l)					(34)								(34)
Balance at June 30, 2025	$	650	$	2	$	305	$	1,970	$	(538)	$	(101)	$	2,288

(g)Includes excise tax accrued of $2 million for each of the quarter ended June 30 and March 31, 2025

(h)For further discussion of the treasury stock retirements, see Note 9, Changes in Capital Structure

(i)Includes $(37) million and $(40) million of equivalent shares purchased in lieu of tax withholding on equity compensation issuances for the quarters ended June 30 and March 31, 2025, respectively

(j)Dividends per common share were $0.440 for each of the quarters ended June 30 and March 31, 2025

(k)Semi-annual dividends per share of Series A Preferred Stock were $51.25 for the period ended March 15, 2025

(l)For further discussion of the Capped Call Options, see Note 9, Changes in Capital Structure

See accompanying notes to condensed consolidated financial statements.

NRG ENERGY, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Nature of Business and Basis of Presentation

General

NRG Energy, Inc., or NRG or the Company, provides electricity, natural gas, and smart-home technology solutions to approximately 8 million residential customers (comprised of 6 million retail energy and 2 million smart home), in addition to large commercial and industrial, data center, and wholesale customers. Across North America, NRG is redefining customers’ experience with energy under brand names such as NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint. As of June 30, 2026, the Company’s core power and natural gas business consists of approximately 25 GW of competitive power generation, including approximately 13 GW from the LSP Portfolio, and a natural gas portfolio that serves approximately 1,900 MMDth annually.

On January 30, 2026, NRG completed the acquisition of the LSP Portfolio. The LSP Portfolio includes 18 natural gas-fired and dual fuel facilities totaling approximately 13 GW of capacity, located across nine states, as well as CPower, a leading demand response platform. The acquired operations of the LSP Portfolio are integrated into the existing NRG segment structure. Plant and market operations are combined into the corresponding geographical segments of Texas and East. The East segment also includes the customer operations of CPower.

The Company’s business is segmented as follows:

Texas, which includes all activity related to customer, plant and market operations in Texas;
East, which includes all activity related to customer, plant and market operations in the East, and demand response;
West/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) other investments;
Vivint Smart Home; and
Corporate activities.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the SEC’s regulations for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The following notes should be read in conjunction with the accounting policies and other disclosures as set forth in the notes to the consolidated financial statements in the Company’s 2025 Form 10-K. Interim results are not necessarily indicative of results for a full year.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all material adjustments consisting of normal and recurring accruals necessary to present fairly the Company’s consolidated balance sheets as of June 30, 2026, and the results of operations, comprehensive income, cash flows and stockholders’ equity for the three and six months ended June 30, 2026 and 2025.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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.

Reclassifications

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

Note 2 — Summary of Significant Accounting Policies

Depreciation and Amortization

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


	Three months ended June 30,				Six months ended June 30,
(In millions)	2026		2025		2026		2025
Amortization of capitalized contract costs related to fulfillment	$	74	$	48	$	140	$	89
Amortization of capitalized contract costs related to customer acquisition	95		70		184		137
Amortization of customer relationships and other intangible assets	133		155		263		308
Depreciation of property, plant and equipment	192		71		339		136
Total depreciation and amortization	$	494	$	344	$	926	$	670

Credit Losses

Retail trade receivables are reported on the consolidated balance sheet net of the allowance for credit losses within accounts receivables, net. Long-term receivables are recorded net of allowance for credit losses in other non-current assets on the consolidated balance sheet. The Company accrues a provision 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 following table represents the activity in the allowance for credit losses for the three and six months ended June 30, 2026 and 2025:


	Three months ended June 30,				Six months ended June 30,
(In millions)	2026		2025		2026		2025
Beginning balance	$	150	$	144	$	146	$	152

Provision for credit losses	45		57		104		113
Write-offs	(73)		(91)		(141)		(170)
Recoveries collected	9		11		19		23
Other	7		6		10		9
Ending balance	$	138	$	127	$	138	$	127

Other Balance Sheet Information

The following table presents the accumulated depreciation included in property, plant and equipment, net and accumulated amortization included in customer relationships, net and other intangible assets, net:


(In millions)	June 30, 2026		December 31, 2025
Property, plant and equipment accumulated depreciation	$	1,930	$	1,774
Customer relationships and other intangible assets accumulated amortization	4,256		3,988

Cash and Cash Equivalents, Funds Deposited by Counterparties and 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:


(In millions)	June 30, 2026		December 31, 2025
Cash and cash equivalents	$	162	$	4,708
Funds deposited by counterparties	167		260
Restricted cash	50		30
Cash and cash equivalents, funds deposited by counterparties and restricted cash shown in the statement of cash flows	$	379	$	4,998

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. 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 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 consists primarily of funds held by the Company for projects under construction or that are restricted in their use due to contractual or legal obligations.

Goodwill

The following table represents the changes in goodwill during the six months ended June 30, 2026:


(In millions)	Texas		East		West/Other		Vivint Smart Home		Total
Balance as of December 31, 2025	$	643	$	721	$	130	$	3,523	$	5,017
Goodwill resulting from the acquisition of LSP Portfolio(a)	1,588		2,214		—		—		3,802


Foreign currency translation adjustments	—		—		(4)		—		(4)
Balance as of June 30, 2026	$	2,231	$	2,935	$	126	$	3,523	$	8,815
(a) The goodwill associated with the acquisition of the LSP Portfolio has been preliminarily allocated to the Texas and East segments as of June 30, 2026

Recent Accounting Developments — Guidance Adopted in 2026

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. The Company adopted ASU 2024-04 prospectively effective January 1, 2026. The adoption of ASU 2024-04 did not have an impact on the Company’s consolidated financial statements and related disclosures.

ASU 2025-05 – In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326) – Measurement of Credit Losses for Accounts Receivable and Contract Assets, or ASU 2025-05. The amendment provides a practical expedient that allows entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets. The Company adopted ASU 2025-05 prospectively effective January 1, 2026. The adoption of ASU 2025-05 did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Recent Accounting Developments — Guidance Not Yet Adopted

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 2025-06 – In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Targeted Improvements to the Accounting for Internal-Use Software, or ASU 2025-06. The update amends guidance on capitalization of internal-use software development costs by removing the previous “development stage” model and clarifying the criteria that must be met for entities to begin capitalizing software costs. This ASU is effective for annual and interim periods beginning after December 15, 2027, with early adoption permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU, (2) retrospectively to all prior periods presented in the financial statement, or (3) using a modified transition approach based on whether an existing project can be capitalized under the updated guidance. The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements and related disclosures.

ASU 2025-07 — In September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) — Derivative Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, or ASU 2025-07. The update refines the scope of derivative accounting guidance by providing a scope exception for non-exchange traded contracts with payments based on the operations or activities of one of the parties to the contract. The update also clarifies accounting under Topic 606 for share-based noncash consideration received from a customer. This ASU is effective for annual and interim periods beginning after December 15, 2026, with early adoption 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) using a modified retrospective basis with a cumulative adjustment-effect adjustment to equity. The Company is currently evaluating the impact of adopting ASU 2025-07 on its consolidated financial statements and related disclosures.

ASU 2025-08 – In November 2025, the FASB issued ASU No. 2025-08, Financial Instruments—Credit Losses (Topic 326) — Purchased Loans, or ASU 2025-08. The update amends the accounting for “purchased seasoned loans” under Topic 326 by requiring estimated expected credit losses to be reflected as an adjustment to the asset’s purchase price at acquisition. The amendments of ASU 2025-08 should be applied prospectively to loans that are acquired on or after adoption date and are effective for annual and interim periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-08 on its consolidated financial statements and related disclosures.

ASU 2025-09 – In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815) — Hedge Accounting Improvements, or ASU 2025-09. The update more closely aligns hedge accounting with the economics of an entity’s risk management activities. The amendments of ASU 2025-09 should be applied prospectively to all hedging relationships and are effective for annual and interim periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-09 on its consolidated financial statements and related disclosures.

ASU 2025-10 – In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832) — Accounting for Government Grants Received by Business Entities, or ASU 2025-10. The update provides authoritative guidance on the accounting for government grants received by an entity. This ASU is effective for annual and interim reporting periods beginning after December 15, 2028, with early adoption permitted. The amendments may be applied either (1) using a modified prospective basis for all grants entered into on, after, or not complete as of the adoption date, (2) modified retrospective basis for all grants entered on, after, or not complete as of the earliest period presented, or (3) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2025-10 on its consolidated financial statements and related disclosures.

ASU 2025-11 – In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270) — Narrow-Scope Improvements, or ASU 2025-11. This ASU clarifies interim reporting by aggregating interim disclosures required throughout the various Codification topics into Topic 270 and requiring entities to produce interim disclosures when a material event or change has occurred since the prior year-end. This ASU is effective for interim periods beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU may be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2025-11 on its disclosures.

ASU 2026-02 – In May 2026, the FASB issued ASU No. 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818), or ASU 2026-02. The update establishes a comprehensive framework for the recognition, measurement, presentation and disclosure of environmental credits and environmental credit obligations. The amendments of ASU 2026-02 should be applied on a retrospective basis through a cumulative-effect adjustment to equity and are effective for annual and interim reporting periods beginning after December 15, 2027, with early adoption permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of adopting ASU 2026‑02 on its consolidated financial statements and related disclosures.

Note 3 — Revenue Recognition

Performance Obligations

As of June 30, 2026, estimated future fixed fee performance obligations are $1.4 billion for the remaining six months of fiscal year 2026, and $2.6 billion, $2.4 billion, $1.6 billion, $905 million and $71 million for the fiscal years 2027, 2028, 2029, 2030 and 2031, 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 and demand response. The cleared auction MWs are subject to penalties for non-performance. The increase in future fixed fee performance obligations as of June 30, 2026, compared to the same period in 2025 is primarily due to the acquisition of the LSP Portfolio.

Disaggregated Revenues

The following tables represent the Company’s disaggregation of revenue from contracts with customers for the three and six months ended June 30, 2026 and 2025:


	Three months ended June 30, 2026
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue:
Home	$	1,788	$	571	$	220	$	587	$	(6)	$	3,160
Business	911		2,199		416		—		—		3,526
Total retail revenue(a)	2,699		2,770		636		587		(6)		6,686
Energy revenue(a)	14		287		—		—		—		301
Capacity revenue(a)	—		392		6		—		(6)		392
Mark-to-market for economic hedging activities(b)	—		14		—		—		4		18
Contract amortization	—		14		—		—		—		14
Other revenue(a)	34		35		2		—		(1)		70
Total revenue	2,747		3,512		644		587		(9)		7,481
Less: Revenues accounted for under topics other than ASC 606 and ASC 815	—		57		2		39		—		98
Less: Realized and unrealized ASC 815 revenue	(5)		65		(1)		—		5		64
Total revenue from contracts with customers	$	2,752	$	3,390	$	643	$	548	$	(14)	$	7,319
(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/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue	$	—	$	6	$	—	$	—	$	—	$	6
Energy revenue	—		27		—		—		1		28
Capacity revenue	—		23		—		—		—		23
Other revenue	(5)		(5)		(1)		—		—		(11)
(b) Revenue relates entirely to unrealized gains and losses on derivative instruments accounted for under ASC 815


	Three months ended June 30, 2025
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue:
Home	$	1,804	$	524	$	207	$	522	$	(5)	$	3,052
Business	975		2,084		408		—		—		3,467
Total retail revenue(a)	2,779		2,608		615		522		(5)		6,519
Energy revenue(a)	15		64		20		—		—		99
Capacity revenue(a)	—		55		6		—		—		61
Mark-to-market for economic hedging activities(b)	—		3		(2)		—		(2)		(1)

Other revenue(a)	52		8		5		—		(3)		62
Total revenue	2,846		2,738		644		522		(10)		6,740
Less: Revenues accounted for under topics other than ASC 606 and ASC 815	—		—		2		28		—		30
Less: Realized and unrealized ASC 815 revenue	12		33		(7)		—		(1)		37
Total revenue from contracts with customers	$	2,834	$	2,705	$	649	$	494	$	(9)	$	6,673
(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/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue	$	—	$	7	$	—	$	—	$	—	$	7
Energy revenue	—		8		(4)		—		—		4
Capacity revenue	—		16		—		—		—		16
Other revenue	12		(1)		(1)		—		1		11
(b) Revenue relates entirely to unrealized gains and losses on derivative instruments accounted for under ASC 815



	Six months ended June 30, 2026
(In millions)	Texas(a)		East(a)		West/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue:
Home	$	3,237	$	1,346	$	562	$	1,165	$	(18)	$	6,292
Business	1,797		7,161		936		—		—		9,894
Total retail revenue(b)	5,034		8,507		1,498		1,165		(18)		16,186
Energy revenue(b)	22		754		—		—		—		776
Capacity revenue(b)	—		631		6		—		(6)		631
Mark-to-market for economic hedging activities(c)	—		(30)		—		—		6		(24)
Contract amortization	—		20		—		—		—		20
Other revenue(b)	84		62		4		—		(2)		148
Total revenue	5,140		9,944		1,508		1,165		(20)		17,737
Less: Revenues accounted for under topics other than ASC 606 and ASC 815	—		103		4		86		—		193
Less: Realized and unrealized ASC 815 revenue	(8)		94		(4)		—		7		89
Total revenue from contracts with customers	$	5,148	$	9,747	$	1,508	$	1,079	$	(27)	$	17,455
(a) Includes results of operations following the acquisition date of the LSP Portfolio of January 30, 2026
(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/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue	$	—	$	47	$	—	$	—	$	—	$	47
Energy revenue	—		32		—		—		1		33
Capacity revenue	—		49		—		—		—		49
Other revenue	(8)		(4)		(4)		—		—		(16)
(c) Revenue relates entirely to unrealized gains and losses on derivative instruments accounted for under ASC 815



	Six months ended June 30, 2025
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue:
Home	$	3,359	$	1,262	$	667	$	1,033	$	(9)	$	6,312
Business	1,807		5,696		920		—		—		8,423
Total retail revenue(a)	5,166		6,958		1,587		1,033		(9)		14,735
Energy revenue(a)	22		222		101		—		(1)		344
Capacity revenue(a)	—		95		14		—		(1)		108
Mark-to-market for economic hedging activities(b)	—		(16)		—		—		—		(16)
Contract amortization	—		(5)		—		—		—		(5)
Other revenue(a)	93		61		12		—		(7)		159
Total revenue	5,281		7,315		1,714		1,033		(18)		15,325
Less: Revenues accounted for under topics other than ASC 606 and ASC 815	—		37		4		54		—		95
Less: Realized and unrealized ASC 815 revenue	10		59		(1)		—		—		68
Total revenue from contracts with customers	$	5,271	$	7,219	$	1,711	$	979	$	(18)	$	15,162
(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/Other		Vivint Smart Home		Corporate/Eliminations		Total
Retail revenue	$	—	$	18	$	—	$	—	$	—	$	18
Energy revenue	—		22		—		—		—		22
Capacity revenue	—		32		—		—		—		32
Other revenue	10		3		(1)		—		—		12
(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 June 30, 2026 and December 31, 2025:


(In millions)	June 30, 2026		December 31, 2025
Capitalized contract costs (included in Prepayments and other current assets and Other non-current assets)	$	1,949	$	1,680

Accounts receivable, net - Contracts with customers	3,470		3,924
Accounts receivable, net - Accounted for under topics other than ASC 606	58		135
Accounts receivable, net - Affiliate	6		6
Total accounts receivable, net	$	3,534	$	4,065

Unbilled revenues (included within Accounts receivable, net - Contracts with customers)	$	1,465	$	1,747
Deferred revenues(a)	1,821		1,643

(a)Deferred revenues recognized under accounting guidance other than ASC 606 was immaterial as of both June 30, 2026 and December 31, 2025

The revenue recognized from contracts with customers during the three months ended June 30, 2026 and 2025 relating to the deferred revenue balance at the beginning of each period was $327 million and $285 million, respectively. The revenue recognized from contracts with customers during the six months ended June 30, 2026 and 2025 relating to the deferred revenue balance at the beginning of each period was $506 million and $430 million, respectively. The change in deferred revenue balances during the three and six months ended June 30, 2026 and 2025 was primarily due to the timing difference of when consideration was received and when the performance obligation was transferred.

Note 4 — Acquisitions

2026 Acquisition

Acquisition of LSP Portfolio

On January 30, 2026, NRG completed the acquisition of the LSP Portfolio from LS Power, pursuant to the Purchase Agreement dated as of May 12, 2025. The acquisition doubles NRG’s generation capacity with the addition of 18 natural gas-fired and dual fuel facilities totaling approximately 13 GW. These facilities, located across nine states, expand NRG’s generation footprint in the Northeast and Texas, where most of its load is located. In addition, NRG acquired CPower, a leading demand response platform, which operates in all the country’s deregulated energy markets and has more than 2,000 commercial and industrial customers.

The consideration consisted of 24.25 million shares of NRG common stock and $6.4 billion in cash, plus preliminary working capital and certain other adjustments of $483 million. The Company funded the cash consideration using a portion of the net proceeds from the 5.750% 2034 Senior Notes, the 2036 Senior Notes, Senior Secured First Lien Notes, due 2030 and the Senior Secured First Lien Notes, due 2035 of $4.4 billion and proceeds of $2.5 billion from the Company’s Revolving Credit Facility.

The total preliminary consideration of $10.583 billion was calculated as follows:


	(In millions)
Cash consideration (inclusive of preliminary working capital and certain other adjustments of $483 million)	$	6,855
Stock consideration: 24,250,000 common shares of NRG, par value $0.01 per share, based on NRG closing share price of $153.72 on January 29, 2026	3,728
Total Preliminary Consideration	$	10,583

Acquisition costs of $3 million and $41 million for the three and six months ended June 30, 2026, respectively, and $23 million for the three and six months ended June 30, 2025, 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 acquired and liabilities assumed provisionally recorded at their estimated fair values on the acquisition date. The initial accounting for the business combination is not complete because the evaluation necessary to assess the fair value of certain net assets acquired is still in process. The provisional amounts are subject to revision until the evaluations are completed to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition closing date.

The purchase price is provisionally allocated as follows:


	(In millions)
Current Assets
Cash and cash equivalents	$	104

Restricted cash	2
Accounts receivable, net	585
Inventory	175
Derivative instruments	715
Cash collateral paid in support of energy risk management activities	184
Prepayments and other current assets	129
Total current assets	1,894
Property, plant and equipment, net	9,717
Other Assets
Operating lease right-of-use assets, net	9
Goodwill(a)(b)	3,802
Customer relationships, net(b)	130
Other intangible assets, net(b)	87
Derivative instruments	335
Deferred income taxes	65
Other non-current assets	32
Total other assets	4,460
Total Assets	$	16,071

Current Liabilities
Current portion of long-term debt and finance leases	$	18
Current portion of operating lease liabilities	1
Accounts payable	617
Derivative instruments	784
Deferred revenue current	6
Accrued expenses and other current liabilities	169
Total current liabilities	1,595


	(In millions)
Other Liabilities
Long-term debt and finance leases	3,311
Non-current operating lease liabilities	24
Derivatives instruments	362
Deferred income taxes	93

Other non-current liabilities	103
Total other liabilities	3,893
Total Liabilities	$	5,488

LSP Portfolio Purchase Price	$	10,583

(a)Goodwill arising from the acquisition of $3.802 billion is attributed to the value of the platform acquired, future customer growth and the expected benefits from combining the operations of the LSP Portfolio with NRG's existing businesses, a majority of which is expected to be deductible for tax purposes. Goodwill was preliminarily allocated to the Texas and East segments of $1.588 billion and $2.214 billion, respectively

(b)The allocation of goodwill and intangible assets to the Company’s reportable segments is anticipated to be finalized by the end of 2026

Measurement Period Adjustments

The following measurement period adjustments were recognized during the quarter ended June 30, 2026:


(In millions)	(Decrease)/Increase
Assets
Accounts receivable, net	$	(2)
Prepayments and other current assets	6
Property, plant and equipment, net	33
Operating lease right-of-use assets, net	(16)
Goodwill	(64)
Deferred income taxes	34
Total decrease in assets	$	(9)
Liabilities
Accounts payable	$	22
Accrued expenses and other current liabilities	(2)
Deferred income taxes	(23)
Other non-current liabilities	(6)
Total decrease in liabilities	$	(9)
Net change in assets	$	—

The measurement period adjustments to the provisional amounts are primarily attributable to refinement of the underlying assumptions used to estimate the fair value of assets acquired as more information was obtained about facts and circumstances that existed as of the acquisition closing date.

Fair Value Measurement of Property, Plant and Equipment

The fair values of the property, plant and equipment were measured using income-based valuation methodologies, which included certain assumptions, such as forecasted future cash flows, discount rates, market prices and asset lives and are classified as Level 3. Property, plant and equipment are depreciated to depreciation and amortization, on a straight-line basis, over the expected useful lives of the assets.

Fair Value Measurement of Intangible Assets

The fair values of intangible assets as of the acquisition closing date were measured as follows:

Customer relationships – Customer relationships, reflective of the LSP Portfolio’s customer base, were valued using an excess earning method of the income approach, and is classified as Level 3. Under this approach, the Company estimated the present value of expected future cash flows resulting from existing customer relationships, considering attrition and charges for

contributory assets (such as net working capital, fixed assets, workforce, trade names and technology) utilized in the business, discounted based on the required rate of return on the acquired intangible asset. The customer relationships are amortized to depreciation and amortization, ratably based on discounted future cash flows.

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

Trade name — Trade name was valued using a relief from royalty method of the income approach, and is classified as Level 3. Under this approach, the fair value is estimated to be the present value of royalties saved which assumed the value of the asset based on discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the asset and instead licensed the asset from another company. The estimated cash flows from the trade name considered the expected probable use of the asset and was discounted using a weighted average cost of capital of comparable companies. The trade name is amortized to depreciation and amortization, on a straight line basis, over the expected life of the asset.

Fair Value Measurement of LS Power Debt

The Company acquired $3.2 billion in aggregate principal of LS Power’s 7.250% Senior Secured Notes due 2032, Lightning Term Loan and Lightning Revolving Facility (together, the "Acquired LS Power Debt"), which were recorded at fair value as of the acquisition closing date. The excess of the acquisition date fair value over the principal amount was $100 million, which was recorded as a premium and amortized through interest expense. The 7.250% Senior Secured Notes were subsequently redeemed pursuant to a tender offer. The 7.250% Senior Secured Notes and Lightning Term Loan were classified as Level 2 and measured at fair value using observable market inputs based on interest rates at the acquisition closing date. For additional information, see Note 7, Long-term Debt and Finance Leases.

Fair Value Measurement of Derivatives Instruments

The fair values of derivatives assets and liabilities as of the acquisition closing date were as follows:


	Fair Value
(In millions)	Total		Level 1		Level 2		Level 3
Derivatives assets	$	1,050	$	17	$	1,004	$	29
Derivatives liabilities	1,146		9		1,113		24

Refer to Note 5**,** Fair Value of Financial Instruments for discussion on derivative fair value measurements.

Supplemental Information

For the three and six months ended June 30, 2026, the LSP Portfolio contributed revenue and income before income taxes as follows:


(In millions)	Three months ended June 30, 2026		Six months ended June 30, 2026
Revenue(a)	$	590	$	1,071
Income before income taxes(b)	12		17

(a)The revenue reported does not include the effects of hedging, which are managed at the Company’s portfolio level and not separately for the business acquired in the LSP Portfolio acquisition

(b)Income before income taxes includes the impact of interest expense on the Acquired LS Power Debt

Supplemental Pro Forma Financial Information for the three and six months ended June 30, 2026 and 2025

The following table provides pro forma combined financial information of NRG and LSP Portfolio, after giving effect to the LSP Portfolio acquisition and related financing transactions as if they had occurred on January 1, 2025. The pro forma financial information has been prepared for illustrative and informational purposes only, and is not intended to project future operating results or be indicative of what the Company's financial performance would have been had the transactions occurred on the date acquired.


	Three months ended June 30,				Six months ended June 30,
(In millions)	2026		2025		2026		2025
Revenue	$	7,481	$	7,179	$	18,366	$	16,248
Net income/(loss)	509		(177)		779		445

Amounts above reflect certain pro forma adjustments that were directly attributable to the LSP Portfolio acquisition. These adjustments include the following:

(i)Elimination of transactions between NRG and LS Power acquired entities.

(ii)Adjustments to align the capitalization of certain maintenance costs.

(iii)Adjustments to align classification of certain historical revenue with the Company’s policy.

(iv)Income statement effects of fair value adjustments based on the preliminary purchase price allocation including depreciation of property, plant and equipment, amortization of intangible assets and adjustment to interest expense as a result of recording assumed debt at acquisition date fair value.

(v)Adjustments to record expected acquisition costs.

(vi)Interest expense assumes the financing transactions directly attributable to the LSP Portfolio acquisition occurred on January 1, 2025.

(vii)Adjustments to remove the impact of unassumed debt.

(viii)Income tax effect of the acquisition accounting adjustments and financing adjustments based on combined blended federal/state tax rate of 24.81% for all periods presented, and the impact of a one time benefit resulting from the acquisition.

2025 Acquisition

Acquisition of Texas Generation Portfolio

On April 10, 2025, the Company acquired all of the ownership interests of six power generation facilities from Rockland Capital, LLC, adding 738 MW of natural gas-fired assets in Texas to its portfolio for $560 million in cash consideration, less $2 million in working capital adjustments. For additional information, refer to Note 4, Acquisitions and Dispositions, to the Company’s 2025 Form 10-K.

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 amounts approximate fair values 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:


	June 30, 2026				December 31, 2025
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value







Total long-term debt, including current portion(a)	$	23,388	$	23,020	$	16,565	$	16,405

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

The fair value of the Company’s publicly-traded long-term debt, the Term Loan B and the Lightning Term Loan are based on quoted market prices and are classified as Level 2 within the fair value hierarchy. The estimated fair values of the T.H. Wharton TEF loan, the Cedar Bayou 5 TEF loan and the Greens Bayou 6 TEF loan are determined using discounted cash flow methodologies, and are classified as Level 3 within the fair value hierarchy. The estimated fair value of the borrowings under the Revolving Credit Facility approximates the carrying value because the interest rate vary with market interest rates, and is classified as Level 3 within the fair value hierarchy. The following table presents the level within the fair value hierarchy for long-term debt, including current portion, as of June 30, 2026 and December 31, 2025:


	June 30, 2026				December 31, 2025
(In millions)	Level 2		Level 3		Level 2		Level 3



Total long-term debt, including current portion	$	21,087	$	1,933	$	16,033	$	372

Recurring Fair Value Measurements

Debt securities, equity securities and derivative assets and liabilities are carried at fair market value.

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


	June 30, 2026
	Fair Value
(In millions)	Total		Level 1		Level 2		Level 3
Investments in securities (classified within other current and non-current assets)	$	34	$	—	$	34	$	—



Derivative assets:
Interest rate contracts	10		—		10		—
Foreign exchange contracts	12		—		12		—
Commodity contracts(a)	4,230		325		3,645		260


Equity securities measured using net asset value practical expedient (classified within other non-current assets)	7
Total assets	$	4,293	$	325	$	3,701	$	260
Derivative liabilities:


Commodity contracts(a)	$	4,094	$	476	$	3,364	$	254
Consumer Financing Program	271		—		—		271
Total liabilities	$	4,365	$	476	$	3,364	$	525

(a)Excludes $553 million of derivative assets and $82 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


	December 31, 2025
	Fair Value
(In millions)	Total		Level 1		Level 2		Level 3
Investments in securities (classified within other current and non-current assets)	$	33	$	—	$	33	$	—


Derivative assets:

Foreign exchange contracts	3		—		3		—
Commodity contracts(a)	3,132		267		2,552		313



Equity securities measured using net asset value practical expedient (classified within other non-current assets)	7
Total assets	$	3,175	$	267	$	2,588	$	313
Derivative liabilities:
Interest rate contracts	$	4	$	—	$	4	$	—
Foreign exchange contracts	3		—		3		—
Commodity contracts(a)	2,932		352		2,377		203
Consumer Financing Program	283		—		—		283
Total liabilities	$	3,222	$	352	$	2,384	$	486

(a)Excludes $622 million of derivative assets and $138 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

The following table reconciles, for the three and six months ended June 30, 2026 and 2025, the beginning and ending balances for financial instruments that are recognized at fair value in the condensed consolidated financial statements, using significant unobservable inputs, for commodity derivatives:


	Fair Value Measurement Using Significant Unobservable Inputs (Level 3)
	Commodity Derivatives(a)
(In millions)	Three months ended June 30, 2026		Three months ended June 30, 2025		Six months ended June 30, 2026		Six months ended June 30, 2025
Beginning balance	$	30	$	49	$	110	$	39

Contracts added from LSP Portfolio acquisition	—		—		5		—
Contracts added from Texas Generation Portfolio acquisition	—		(91)		—		(91)
Total (losses)/gains realized/unrealized included in earnings	(32)		22		(134)		34
Purchases	10		37		22		37
Transfers into Level 3(b)	(1)		63		—		63
Transfers out of Level 3(b)	(1)		1		3		(1)
Ending balance	$	6	$	81	$	6	$	81
(Losses)/gains for the period included in earnings attributable to the change in unrealized gains or losses relating to assets or liabilities still held as of period end	$	(31)	$	5	$	(104)	$	47

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

(b)Transfers into/out of Level 3 within the fair value hierarchy are related to the availability of consensus pricing and external broker quotes, including volatilities, and are valued as of the end of the reporting period. All transfers in/out of Level 3 are from/to Level 2

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 three and six months ended June 30, 2026 and 2025, 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
(In millions)	Three months ended June 30, 2026		Three months ended June 30, 2025		Six months ended June 30, 2026		Six months ended June 30, 2025
Beginning balance	$	(252)	$	(207)	$	(283)	$	(203)

New contractual obligations	(60)		(81)		(86)		(113)
Settlements	42		31		102		67
Total losses included in earnings	(1)		—		(4)		(8)
Ending balance	$	(271)	$	(257)	$	(271)	$	(257)

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

Derivative Fair Value Measurements

The fair value of the Company’s contracts primarily consist of non-exchange traded contracts based on consensus pricing provided by independent pricing services. As of June 30, 2026, contracts valued with prices provided by models and other valuation techniques made up 6% of derivative assets and 12% of derivative liabilities.

NRG’s significant positions classified as Level 3 include physical and financial natural gas, power, capacity contracts and RECs executed in illiquid markets, FTRs, certain power options and the Consumer Financing Program. 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. REC prices are based on market information and internally developed pricing models. Power options are valued using industry standard option models. The valuation of certain power options includes significant unobservable inputs such as forward volatilities. 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 June 30, 2026 and December 31, 2025:



	June 30, 2026
	Fair Value						Input/Range
(In millions, except as noted)	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High			Weighted Average
Natural Gas Contracts	$	25	$	16	Discounted Cash Flow	Forward Market Price ($ per MMBtu)	$	1		$	18		$	5
Power Contracts	131		125		Discounted Cash Flow	Forward Market Price ($ per MWh)	0			192			28
Capacity Contracts	22		19		Discounted Cash Flow	Forward Market Price ($ per MW/Day)	54			625			331
RECs	18		35		Discounted Cash Flow	Forward Market Price ($ per Certificate)	2			370			18
FTRs	44		25		Discounted Cash Flow	Auction Prices ($ per MWh)	(74)			25,013			1
Power Options	20		34		Option Models	Volatilities	32		%	694		%	131		%
Consumer Financing Program	—		271		Discounted Cash Flow	Collateral Default Rates	0.74		%	43.50		%	8.58		%
					Discounted Cash Flow	Collateral Prepayment Rates	2.00		%	3.00		%	2.48		%
					Discounted Cash Flow	Credit Loss Rates	6.53		%	60.00		%	17.70		%
	$	260	$	525



	December 31, 2025
	Fair Value						Input/Range
(In millions, except as noted)	Assets		Liabilities		Valuation Technique	Significant Unobservable Input	Low			High			Weighted Average
Natural Gas Contracts	$	47	$	40	Discounted Cash Flow	Forward Market Price ($ per MMBtu)	$	0		$	17		$	5
Power Contracts	168		64		Discounted Cash Flow	Forward Market Price ($ per MWh)	0			125			29
Capacity Contracts	20		18		Discounted Cash Flow	Forward Market Price ($ per MW/Day)	49			577			270
RECs	12		25		Discounted Cash Flow	Forward Market Price ($ per Certificate)	2			370			17
FTRs	22		11		Discounted Cash Flow	Auction Prices ($ per MWh)	(50)			19,100			0
Power Options	44		45		Option Models	Volatilities	22		%	517		%	110		%
Consumer Financing Program	—		283		Discounted Cash Flow	Collateral Default Rates	1.18		%	42.00		%	7.86		%
					Discounted Cash Flow	Collateral Prepayment Rates	2.00		%	3.00		%	2.52		%
					Discounted Cash Flow	Credit Loss Rates	6.40		%	60.00		%	16.94		%
	$	313	$	486

The following table provides sensitivity of fair value measurements to increases/(decreases) in significant, unobservable inputs as of June 30, 2026 and December 31, 2025:


Significant Unobservable Input	Position	Change In Input	Impact on Fair Value Measurement
Forward Market Price Natural Gas/Power/Capacity/RECs	Buy	Increase/(Decrease)	Higher/(Lower)
Forward Market Price Natural Gas/Power/Capacity/RECs	Sell	Increase/(Decrease)	Lower/(Higher)
FTR Prices	Buy	Increase/(Decrease)	Higher/(Lower)
FTR Prices	Sell	Increase/(Decrease)	Lower/(Higher)
Volatilities	Buy	Increase/(Decrease)	Higher/(Lower)
Volatilities	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)

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 is calculated based on published default probabilities. As of June 30, 2026, the credit reserve resulted in a $1 million increase in fair value, primarily within cost of operations. As of December 31, 2025, the credit reserve was immaterial.

Concentration of Credit Risk

In addition to the credit risk discussion as disclosed in Note 2, Summary of Significant Accounting Policies, to the Company’s 2025 Form 10-K, the following is a discussion of the concentration of credit risk for the Company’s contractual obligations. Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. NRG is exposed to counterparty credit risk through various activities including wholesale sales, fuel purchases and retail supply arrangements, as well as retail customer credit risk through its retail load activities.

Counterparty Credit Risk

The Company’s counterparty credit risk policies are disclosed in its 2025 Form 10-K. As of June 30, 2026, counterparty credit exposure, excluding credit exposure from RTOs, ISOs, registered commodity exchanges and certain long-term agreements, was $1.1 billion and NRG held collateral (cash and letters of credit) against those positions of $66 million, resulting in a Net Exposure of $1.1 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 55% of the Company’s exposure before collateral is expected to roll off by the end of 2027. 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.


	Net Exposure(a)(b)
Category by Industry Sector	(% of Total)

Utilities, energy merchants, marketers and other	77	%
Financial institutions	23

Total as of June 30, 2026	100	%


	Net Exposure (a)(b)
Category by Counterparty Credit Quality	(% of Total)
Investment grade	74	%
Non-investment grade/Non-Rated	26
Total as of June 30, 2026	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 total Net Exposure as of June 30, 2026. 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 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 June 30, 2026, aggregate credit risk exposure managed by NRG to these counterparties was approximately $625 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 as well as through Vivint Smart Home, which serve both 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 non-payment of customer accounts receivable and the loss of in-the-money forward value. The Company manages retail credit risk by using established credit policies, which include monitoring of the portfolio and the use of credit mitigation measures such as deposits or prepayment arrangements.

As of June 30, 2026, 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 their bills in a timely manner or at all, which could increase customer delinquencies and may lead to an increase in credit losses.

Note 6 — Accounting for Derivative Instruments and Hedging Activities

Energy-Related Commodities

As of June 30, 2026, NRG had energy-related derivative instruments extending through 2036. The Company marks these derivatives to market through the consolidated statement of operations. NRG has executed energy-related contracts extending through 2037 that qualified for the NPNS exception and were therefore exempt from fair value accounting treatment.

Interest Rate Derivatives

NRG is exposed to changes in interest rates through the Company’s issuance of debt. To mitigate the Company’s interest rate risk, NRG enters into interest rate derivatives, including swaps and treasury locks. As of June 30, 2026, the Company had $700 million of interest rate swaps extending through 2029 to mitigate the risk of the floating rate of the Term Loan B. In February 2026, the Company entered into treasury locks with a total notional amount of $800 million which were fully terminated in March 2026.

Foreign Exchange Contracts

NRG is exposed to changes in foreign currency primarily associated with the purchase of U.S. dollar denominated natural gas for its Canadian business. To manage the Company’s foreign exchange risk, NRG entered into foreign exchange contracts. As of June 30, 2026, NRG had foreign exchange contracts extending through 2030. The Company marks these derivatives to market through the consolidated statement of operations.

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 providers 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 category, excluding those derivatives that qualified for the NPNS exception, as of June 30, 2026 and December 31, 2025. 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	June 30, 2026	December 31, 2025
Emissions	Short Ton	8	2
Renewable Energy Certificates	Certificates	13	13
Coal	Short Ton	5	8
Natural Gas	MMBtu	1,413	907

Power	MWh	34	103
Interest	Dollars	700	700
Foreign Exchange	Dollars	424	437
Consumer Financing Program	Dollars	1,293	1,354

Fair Value of Derivative Instruments

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


	Fair Value
	Derivative Assets				Derivative Liabilities
(In millions)	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025




Derivatives Not Designated as Cash Flow or Fair Value Hedges:
Interest rate contracts - current	$	1	$	—	$	—	$	4
Interest rate contracts - long-term	9		—		—		—
Foreign exchange contracts - current	9		2		—		1
Foreign exchange contracts - long-term	3		1		—		2
Commodity contracts - current	2,982		1,991		2,917		1,997
Commodity contracts - long-term	1,248		1,141		1,177		935
Consumer Financing Program - current	—		—		168		184
Consumer Financing Program - long-term	—		—		103		99
Derivatives Not Designated as Cash Flow or Fair Value Hedges	$	4,252	$	3,135	$	4,365	$	3,222
Deferred gains/losses on NPNS contracts - current	196		196		35		71
Deferred gains/losses on NPNS contracts - long-term	357		426		47		67
Deferred gains/losses on NPNS contracts(a)	$	553	$	622	$	82	$	138
Total Derivatives Not Designated as Cash Flow or Fair Value Hedges	$	4,805	$	3,757	$	4,447	$	3,360

(a)Balances related to certain derivative contracts that were accounted for as derivative contracts prior to the election of the NPNS exemption on October 1, 2024 and the discontinuance of derivative accounting treatment as of the election date

The Company has elected to present derivative assets and liabilities on the consolidated 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 consolidated balance sheet. The following table summarizes the offsetting of 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 June 30, 2026
Interest rate contracts:
Derivative assets	$	10	$	—	$	—	$	10


Foreign exchange contracts:
Derivative assets	$	12	$	—	$	—	$	12


Commodity contracts:
Derivative assets	$	4,783	$	(3,574)	$	(158)	$	1,051
Derivative liabilities	(4,176)		3,574		139		(463)
Total commodity contracts	$	607	$	—	$	(19)	$	588
Consumer Financing Program:
Derivative liabilities	$	(271)	$	—	$	—	$	(271)
Total derivative instruments	$	358	$	—	$	(19)	$	339


	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, 2025
Interest rate contracts:

Derivative liabilities	$	(4)	$	—	$	—	$	(4)

Foreign exchange contracts:
Derivative assets	$	3	$	(2)	$	—	$	1
Derivative liabilities	(3)		2		—		(1)
Total foreign exchange contracts	$	—	$	—	$	—	$	—
Commodity contracts:
Derivative assets	$	3,754	$	(2,724)	$	(215)	$	815
Derivative liabilities	(3,070)		2,724		137		(209)
Total commodity contracts	$	684	$	—	$	(78)	$	606
Consumer Financing Program:
Derivative liabilities	$	(283)	$	—	$	—	$	(283)


Total derivative instruments	$	397	$	—	$	(78)	$	319

Impact of Derivative Instruments on the Statements of Operations

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

The following table summarizes 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 consolidated statement of operations. The effect of foreign exchange and commodity hedges are included within revenues and cost of operations. The effect of the interest rate contracts are included within interest expense. The effect of the Consumer Financing Program is included in other income, net.


(In millions)	Three months ended June 30,				Six months ended June 30,
Unrealized mark-to-market results	2026		2025		2026		2025
Reversal of previously recognized unrealized losses/(gains) on settled positions related to economic hedges(a)	$	181	$	120	$	147	$	(98)
Reversal of acquired loss positions related to economic hedges	6		9		16		5
Net unrealized gains/(losses) on open positions related to economic hedges	102		(412)		(79)		141
Total unrealized mark-to-market gains/(losses) for economic hedging activities	289		(283)		84		48
Reversal of previously recognized unrealized losses on settled positions related to trading activity	4		3		4		2

Net unrealized (losses)/gains on open positions related to trading activity	(6)		11		(13)		8
Total unrealized mark-to-market (losses)/gains for trading activity	(2)		14		(9)		10
Total unrealized gains/(losses) - commodities and foreign exchange	$	287	$	(269)	$	75	$	58

(a)The three months ended June 30, 2026 and 2025, includes $38 million and $30 million, respectively, and the six months ended June 30, 2026 and 2025, includes $(13) million and $(53) million, respectively, 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


	Three months ended June 30,				Six months ended June 30,
(In millions)	2026		2025		2026		2025
Total impact to statement of operations - interest rate contracts	$	8	$	(5)	$	14	$	(14)
Unrealized gains/(losses) included in revenues - commodities	$	16	$	13	$	(33)	$	(6)
Unrealized gains/(losses) included in cost of operations - commodities	266		(266)		98		84
Unrealized gains/(losses) included in cost of operations - foreign exchange	5		(16)		10		(20)
Total impact to statement of operations - commodities and foreign exchange	$	287	$	(269)	$	75	$	58
Total impact to statement of operations - Consumer Financing Program	$	(1)	$	—	$	(4)	$	(8)

The reversals of acquired loss 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.

For the six months ended June 30, 2026, the $79 million unrealized loss from open economic hedge positions was primarily the result of a decrease in the value of forward positions as a result of decreases in natural gas prices and CAISO and Alberta power prices.

For the six months ended June 30, 2025, the $141 million unrealized gain from open economic hedge positions was primarily the result of an increase in the value of forward positions as a result of increases in ERCOT power prices.

Credit Risk Related Contingent Features

Certain of the Company’s 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 all contracts with adequate assurance clauses that were in a net liability position as of June 30, 2026 was $666 million. The Company is also 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 $357 million as of June 30, 2026. In the event of a downgrade in the Company’s credit rating and if called for by the counterparty, $61 million of additional collateral would be required for all contracts with credit rating contingent features as of June 30, 2026.

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

Note 7 — Long-term Debt and Finance Leases

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


(In millions, except rates)	June 30, 2026		December 31, 2025		Interest rate %
Recourse debt:
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		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		925		6.000
Senior Notes, due 2034	950		950		6.250
Senior Notes, due 2034	1,250		1,250		5.750
Senior Notes, due 2034	1,050		—		5.875
Senior Notes, due 2036	2,400		2,400		6.000
Senior Notes, due 2036	1,050		—		6.125


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 2030	625		625		4.734
Senior Secured First Lien Notes, due 2031	500		—		4.955
Senior Secured First Lien Notes, due 2033	740		740		7.000
Senior Secured First Lien Notes, due 2035	625		625		5.407

Revolving Credit Facility	1,449		—		SOFR + 1.720
Term Loan B, due 2031	2,287		2,299		SOFR + 1.750
Term Loan B, due 2033	898		—		SOFR + 1.750
Tax-exempt bonds	466		466		4.000 - 4.750
T.H. Wharton TEF loan, due 2045	216		189		3.000
Cedar Bayou 5 TEF loan, due 2045	334		255		3.000
Greens Bayou 6 TEF loan, due 2045	146		90		3.000
Subtotal recourse debt	21,673		16,576
Non-recourse debt:

Lightning Term Loan, due 2031	1,719		—		SOFR + 2.000

Subtotal all Lightning non-recourse debt	1,719		—
Subtotal long-term debt (including current maturities)	23,392		16,576
Finance leases	45		24		various
Subtotal long-term debt and finance leases (including current maturities)	23,437		16,600
Less current maturities	(1,512)		(31)
Less debt issuance costs	(177)		(146)
Discounts, net of premiums	(4)		(11)
Total long-term debt and finance leases	$	21,744	$	16,412

Recourse Debt

Term Loan B Incurrence

On April 28, 2026, the Company and APX Group LLC, as borrowers, and certain of the Company’s subsidiaries, as guarantors, entered into the Sixteenth Amendment to the Second Amended and Restated Credit Agreement (the “Sixteenth Amendment”), dated of June 30, 2016, with, among others, Citicorp North America, Inc., as administrative agent and as collateral agent, and certain financial institutions, as lenders (as amended, restated, supplemented and/or otherwise modified from time to time, the “Credit Agreement”), in order to (i) establish new term loans in aggregate principal amount of

$900 million (the “Incremental Term Loans”), and (ii) make certain modifications to the Credit Agreement in connection therewith. The Incremental Term Loans constitute a new and separate class of term loans under the Credit Agreement.

Issuance of Unsecured Notes and Secured Notes

On April 28, 2026, the Company issued $2.1 billion in aggregate principal amount of senior unsecured notes consisting of (i) $1.05 billion aggregate principal amount of 5.875% senior notes due 2034 (the “New 2034 Notes”) and (ii) $1.05 billion aggregate principal amount of 6.125% senior notes due 2036 (the “New 2036 Notes” and, together with the New 2034 Notes, the “New Unsecured Notes”). The New Unsecured Notes are senior unsecured obligations of the Company and are guaranteed by its wholly-owned U.S. subsidiaries that guarantee the loans under the Senior Credit Facility. The New 2034 Notes will mature on May 15, 2034. Interest on the New 2034 Notes will be paid semi-annually on May 15 and November 15 of each year commencing on November 15, 2026. The New 2036 Notes will mature on May 15, 2036. Interest on the New 2036 Notes will be paid semi-annually commencing on November 15, 2026.

On April 28, 2026, the Company also issued $500 million aggregate principal amount of 4.955% senior secured first lien notes due 2031 (the “New 2031 Notes”). The New 2031 Notes are senior secured obligations of the Company and are guaranteed by its wholly-owned U.S. subsidiaries that guarantee the loans under the Senior Credit Facility. The New 2031 Notes are secured by a first priority security interest in the same collateral that is pledged for the benefit of the lenders under the Senior Credit Facility and existing senior secured notes, which collateral consists of a substantial portion of the property and assets owned by the Company and the guarantors. The New 2031 Notes will mature on April 30, 2031. Interest on the New 2031 Notes will be paid semi-annually on April 30 and October 30 of each year commencing on October 30, 2026.

The Company used the net proceeds from the New Unsecured Notes, together with the net proceeds from the New 2031 Notes, and the Incremental Term Loans, to pay the tender price of the Tender Offer (as defined below), to pay estimated transaction fees, expenses and premiums, and the remainder to repay a portion of the outstanding borrowings under the Company’s Revolving Credit Facility.

Bilateral Letter of Credit Facilities

In January and February 2026, the Company and certain of its subsidiaries, as guarantors, entered into amendments to its existing bilateral letter of credit facilities to increase the size of its bilateral credit facilities by $410 million and $90 million, respectively, to provide additional liquidity. As of June 30, 2026, $784 million was issued under these facilities.

Credit Default Swap Facility

On July 21, 2026, the Company entered into a credit agreement, with commitments from lenders not to exceed $250 million, for the issuance of letters of credit to support normal business operations. As of July 31, 2026, there were no letters of credit issued under this facility.

Texas Development Projects

The T.H. Wharton TEF loan, due 2045, has been fully disbursed as of June 30, 2026. As of July 31, 2026, $344 million and $167 million of disbursements have occurred for the Cedar Bayou 5 TEF loan, due 2045 and Greens Bayou 6 TEF loan, due 2045, respectively (together with the T.H. Wharton TEF loan, due 2045, collectively the “TEF Loans”).

Receivables Securitization Facilities

On June 18, 2026, NRG Receivables, an indirect wholly-owned subsidiary of the Company, amended its existing Receivables Facility to, among other things, extend the scheduled termination date to June 17, 2027. As of June 30, 2026, there were $991 million in letters of credit issued under the Receivables Facility.

2032 Senior Notes

The Sustainability Performance Target was satisfied with respect to the year ended December 31, 2025. For additional information regarding the 2032 Senior Notes’ early redemption feature, see Note 12, Long-term Debt and Finance Leases, to the Company’s 2025 Form 10-K.

Non-recourse Debt

The following are descriptions of certain indebtedness of NRG’s subsidiaries, which are non-recourse debt to NRG.

Acquired LS Power Debt

On January 30, 2026 (the “Acquisition Closing Date”), in connection with the acquisition of the LSP Portfolio from LS Power, Lightning, an indirect, wholly-owned subsidiary of NRG as of such date, retained its 7.250% Senior Secured Notes due 2032, term loan and revolving loan facility. As of June 30, 2026, the 7.250% Senior Secured Notes due 2032 are no longer outstanding as discussed below.

Lightning Notes

On the Acquisition Closing Date, Lightning remained the issuer of $1.5 billion aggregate principal amount of 7.250% Senior Secured Notes due 2032 (the “Lightning 2032 Notes”) issued pursuant to an indenture dated August 16, 2024 (the “Lightning Indenture”), by and among Lightning, Lightning’s subsidiaries that are guarantors from time to time party thereto, and U.S. Bank Trust Company, National Association, in its capacities as trustee and collateral trustee (the “Lightning Notes Trustee”).

Subject to certain qualifications and exceptions, the Lightning Indenture, among other things, limits Lightning’s ability and the ability of Lightning’s restricted subsidiaries to incur or guarantee additional indebtedness; create or incur liens; make certain restricted payments; and consolidate, merge or transfer all or substantially all of Lightning’s and its subsidiaries’ assets on a consolidated basis.

Lightning Tender Offer and Redemption

On April 14, 2026, Lightning commenced a cash tender offer to purchase any and all of the Lightning 2032 Notes (the “Tender Offer”). In conjunction with the Tender Offer, Lightning solicited consents (the “Consent Solicitation”) to adopt certain proposed amendments to the Lightning Indenture to (1) eliminate substantially all of the restrictive covenants and certain affirmative covenants and events of default and related provisions therein and (2) release all of the guarantees of and the collateral securing the Lightning 2032 Notes.

In connection with the Tender Offer, $1.495 billion aggregate principal amount of Lightning 2032 Notes (or 99.670%) were tendered and repurchased by Lightning for an aggregate purchase price of $1.6 billion (plus accrued and unpaid interest to, but excluding, the applicable repurchase date). In addition, pursuant to the Consent Solicitation, Lightning obtained consents from the requisite holders of the Lightning 2032 Notes and, on April 29, 2026, Lightning, the Lightning Notes Trustee, and the relevant guarantors, entered into a supplemental indenture to the Lightning Indenture to effectuate the amendments described above.

Further, pursuant to the terms of the Lightning Indenture, on April 28, 2026, Lightning issued a notice of redemption to redeem (the “Redemption”) the remaining $5 million aggregate principal amount of the Lightning 2032 Notes at a redemption price of 101.375% (plus accrued and unpaid interest to, but excluding, the redemption date). The redemption of such notes occurred on May 14, 2026. In connection with the Tender Offer and Redemption, a $9 million loss on debt extinguishment was recorded.

Lightning Credit Facility

On the Acquisition Closing Date, Lightning remained party to a credit agreement (the “Lightning Credit Agreement”) with Morgan Stanley Senior Funding, Inc. as administrative agent and collateral agent and various lenders and issuing banks from time to time party thereto. The Lightning Credit Agreement consists of a term loan in an original aggregate principal amount of $1.75 billion (the “Lightning Term Loan”) and revolving loan facility of $600 million (the “Lightning Revolving Facility”). The maturity date of the Lightning Term Loan and the Lightning Revolving Facility is August 16, 2031, and August 16, 2029, respectively. Interest on the Lightning Term Loan and revolving credit borrowings under the Lightning Revolving Facility accrues at a rate per annum equal to the SOFR rate plus a margin of 2.250%, and 2.000%, respectively, subject to leverage-based margin step-downs. As of June 30, 2026, the margin on the Lightning Term Loan and revolving credit borrowings under the Lightning Revolving Facility is 2.000%, and 1.750%, respectively, due to leveraged-based margin step-downs. As of June 30, 2026, there were no outstanding borrowings and there were $82 million in letters of credit issued under the Lightning Revolving Facility.

Note 8 — Investments Accounted for by the Equity Method and Variable Interest Entities

Entities that are not Consolidated

NRG accounts for the Company’s 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.

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, which has entered into financing transactions related to the Receivables Facility as further described in Note 12, Long-term Debt and Finance Leases, to the Company’s 2025 Form 10-K.

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


(In millions)	June 30, 2026		December 31, 2025
Accounts receivable, net and Other current assets	$	2,470	$	2,779




Current liabilities	156		155







Net assets	$	2,314	$	2,624

Note 9 — Changes in Capital Structure

As of June 30, 2026 and December 31, 2025, 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 stock issued and outstanding:


	Preferred	Common
	Issued and Outstanding	Issued	Treasury	Outstanding
Balance as of December 31, 2025	650,000	199,828,615	(9,452,008)	190,376,607
Shares issued under LTIPs	—	1,461,185	—	1,461,185
Shares issued under ESPP	—	—	85,289	85,289

Shares repurchased	—	—	(5,865,179)	(5,865,179)

Shares issued for the acquisition of the LSP Portfolio	—	24,250,000	—	24,250,000
Retirement of treasury stock	—	(340,900)	340,900	—
Balance as of June 30, 2026	650,000	225,198,900	(14,890,998)	210,307,902
Shares issued under LTIPs	—	6,851	—	6,851

Shares repurchased	—	—	(104,270)	(104,270)



Balance as of July 31, 2026	650,000	225,205,751	(14,995,268)	210,210,483

Common Stock

Share Repurchases

The Company’s long-term capital allocation policy is to target allocating approximately 80% of cash available for allocation, after debt reduction, to be returned to shareholders. During 2026, the Company repurchased shares under its $3.7 billion share repurchase program which began in 2023 and was completed during the quarter ended March 31, 2026. Upon completion of that program, the Company began repurchasing shares under the Board of Directors’ authorization approved on October 16, 2025, permitting up to $3.0 billion of share repurchases through 2028*.* Share repurchases under these programs are summarized below.

The following table summarizes the share repurchases made under the $3.7 billion authorization which was completed during the quarter ended March 31, 2026:


	Total number of shares purchased	Average price paid per share(a)		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	(b)		950
Total Share Repurchases during 2023	22,730,940			$	1,150	(c)
2024 Repurchases:
Repurchases made under the accelerated share repurchase agreements	1,163,230	(b)		—
Open market repurchases	10,562,333	$	87.57	925
Total Share Repurchases during 2024	11,725,563			$	925	(d)
2025 Repurchases:
Open market repurchases	9,971,620	$	130.58	1,302
Shares received from the exercise of the Capped Call Options	224,585	$	69.38	16		(e)
Total Share Repurchases during 2025	10,196,205			$	1,318	(f)
2026 Repurchases:
Open market repurchases	1,146,900	$	156.62	180
Shares repurchased from LS Power	771,080	$	164.00	127		(g)
Total Share Repurchases during 2026 under the $3.7 billion authorization	1,917,980			$	307
Total Share Repurchases under the $3.7 billion authorization	46,570,688	$	79.43	$	3,700

(a)The average price paid per share excludes excise tax owed and commissions and fees paid in connection with the share repurchases

(b)Under the November 6, 2023 accelerated share repurchase agreements, the Company received a total of 18,839,372 shares for an average price per share of $50.43, excluding the impact of the excise tax incurred. For additional information, refer to Note 15, Capital Structure, to the Company’s 2025 Form 10-K

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

(d)Excludes $9 million of excise tax accrued in 2024 which was paid in 2025

(e)For further information on the Capped Call Options, see discussion below

(f)Excludes $11 million of excise tax accrued in 2025 which was paid in 2026

(g)The Company entered into a stock purchase agreement to repurchase 1,829,269 shares of NRG common stock from LS Power. 771,080 shares were repurchased under the $3.7 billion authorization, and the remaining 1,058,189 shares were repurchased under the $3.0 billion authorization

The following table summarizes the share repurchases made under the $3.0 billion authorization through July 31, 2026:


	Total number of shares purchased	Average price paid per share(a)		Amounts paid for shares purchased (in millions)
2026 Repurchases:
Shares repurchased from LS Power	1,058,189	$	164.00	$	176	(b)
Open market repurchases	2,889,010	$	151.74	438		(c)
Total Share Repurchases during the six months ended June 30, 2026 under the $3.0 billion authorization	3,947,199			614		(d)
Open market repurchases July 1, 2026 through July 31, 2026	104,270	$	136.23	14
Total Share Repurchases under the $3.0 billion authorization	4,051,469	$	154.54	$	628

(a)The average price paid per share excludes excise tax owed and commissions and fees paid in connection with the share repurchases

(b)The Company entered into a stock purchase agreement to repurchase 1,829,269 shares of NRG common stock from LS Power. 771,080 shares were repurchased under the $3.7 billion authorization, and the remaining 1,058,189 shares were repurchased under the $3.0 billion authorization

(c)Includes $1 million accrued as of June 30, 2026

(d)Excludes $7 million accrued for estimated excise tax for the six months ended June 30, 2026

Employee Stock Purchase Plan

The Company offers participation in the ESPP which allows eligible employees to elect to withhold between 1% and 100%, subject to an annual maximum of $25,000, 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.

NRG Common Stock Dividends

During the first quarter of 2026, NRG increased the annual dividend to $1.90 from $1.76 per share. A quarterly dividend of $0.475 per share was paid on the Company’s common stock during the three months ended June 30, 2026. On July 22, 2026, NRG declared a quarterly dividend on the Company’s common stock of $0.475 per share, payable on August 17, 2026 to stockholders of record as of August 3, 2026. The Company targets an annual 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.

Retirement of Treasury Stock

During the six months ended June 30, 2026 and 2025, 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)
2026 Retirements:
Shares retired during the first quarter of 2026	340,900	$	116.00	$	40



2025 Retirements:
Shares retired during the first quarter of 2025	3,070,996	$	58.23	$	179
Shares retired during the second quarter of 2025	2,443,610	73.01		178

Total shares retired during the six months ended June 30, 2025	5,514,606			$	357

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 mitigate the impact of potential dilution of the Convertible Senior Notes. Each had a strike price of $40.63 per share, subject to certain adjustments, and effectively locked in a conversion premium of $257 million on the remaining $232 million balance of the Convertible Senior Notes. The Capped Calls were separate transactions and not part of the terms of the Convertible Senior Notes. As these transactions met certain accounting criteria, the Capped Calls were recorded in stockholders’ equity. In the second quarter of 2024, the Company recorded $253 million as a reduction to additional paid-in capital and a $4 million loss 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. In the second quarter of 2025, the expiration date of the options was extended from June 1, 2025 to July 8, 2025.

Upon the exercise and settlement of the Capped Calls on July 8, 2025, the Company paid a total amount of $292 million, inclusive of the initial conversion premium of $257 million. The Company received 4,210,920 shares of common stock, of which 3,986,335 were issued to the holders of the Convertible Senior Notes upon conversion, and the remaining 224,585 received were retired by the Company.

Preferred Stock

Series A Preferred Stock Dividends

During the quarters ended March 31, 2026 and 2025, the Company declared and paid semi-annual 10.25% dividends of $51.25 per share on its outstanding Series A Preferred Stock, each totaling $33 million.

Note 10 — 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 period are weighted for the portion of the period 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. 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. For the three and six months ended June 30, 2025, the Convertible Senior Notes were convertible, under certain circumstances, into cash or a combination of cash and the Company’s common stock. The Company included the potential share settlements, if any, in the denominator for purposes of computing diluted income/(loss) per share under the if converted method. The potential shares settlements were calculated as the excess of the Company’s conversion obligation over the aggregate principal amount (which was settled in cash), divided by the average share price for the period. The Company settled all of the outstanding Convertible Senior Notes as of July 8, 2025.

NRG’s basic and diluted income/(loss) per share is shown in the following table:


	Three months ended June 30,				Six months ended June 30,
(In millions, except per share data)	2026		2025		2026		2025
Basic income/(loss) per share:
Net income/(loss)	$	506	$	(104)	$	631	$	646
Less: Cumulative dividends attributable to Series A Preferred Stock	17		17		34		34
Net income/(loss) available for common stockholders	$	489	$	(121)	$	597	$	612
Weighted average number of common shares outstanding - basic	211		196		209		197
Income/(Loss) per weighted average common share — basic	$	2.32	$	(0.62)	$	2.86	$	3.11

Diluted income/(loss) per share:
Net income/(loss)	$	506	$	(104)	$	631	$	646
Less: Cumulative dividends attributable to Series A Preferred Stock	17		17		34		34
Net income/(loss) available for common stockholders	$	489	$	(121)	$	597	$	612
Weighted average number of common shares outstanding - basic	211		196		209		197
Incremental shares attributable to the issuance of equity compensation (treasury stock method)	1		—		1		2
Incremental shares attributable to the potential share settlements of the Convertible Senior Notes (if converted method)	—		—		—		4
Weighted average number of common shares outstanding - dilutive	212		196		210		203
Income/(Loss) per weighted average common share — diluted	$	2.31	$	(0.62)	$	2.84	$	3.01

For the three months ended June 30, 2025, the Company had 3 million of outstanding equity compensation instruments and 4 million of potential share settlement of the Convertible Senior Notes that were not included in the computation of the Company’s diluted loss per share. For all other periods presented, 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.

Note 11 — 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 and wholesale 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. 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, to the Company’s 2025 Form 10-K.

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.


	Three months ended June 30, 2026
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate		Eliminations		Total
Revenue(a)	$	2,747	$	3,512	$	644	$	587	$	—	$	(9)	$	7,481
Operating expenses	2,335		2,866		526		300		30		(9)		6,048
Depreciation and amortization	123		134		7		216		14		—		494

Total operating cost and expenses	2,458		3,000		533		516		44		(9)		6,542
(Loss)/Gain on sale of assets	—		(6)		43		—		—		—		37
Operating income/(loss)	289		506		154		71		(44)		—		976


Other income, net	—		—		1		—		5		—		6
Loss on debt extinguishment	—		—		—		—		(9)		—		(9)
Interest expense	—		—		—		—		(310)		—		(310)
Income/(loss) before income taxes	289		506		155		71		(358)		—		663
Income tax expense	—		—		—		—		157		—		157
Net income/(loss)	$	289	$	506	$	155	$	71	$	(515)	$	—	$	506






(a) Inter-segment sales and inter-segment net derivative gains and losses included in revenues	$	6	$	3	$	—	$	—	$	—	$	—	$	9

Other segment information
Capital expenditures	$	288	$	18	$	1	$	11	$	20	$	—	$	338


	Three months ended June 30, 2025
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate		Eliminations		Total
Revenue(a)	$	2,846	$	2,738	$	644	$	522	$	—	$	(10)	$	6,740
Operating expenses	2,371		3,048		493		442		52		(10)		6,396
Depreciation and amortization	93		36		9		195		11		—		344

Total operating cost and expenses	2,464		3,084		502		637		63		(10)		6,740

Operating income/(loss)	382		(346)		142		(115)		(63)		—		—

Other income, net	(1)		—		—		—		6		—		5
Loss on debt extinguishment	—		—		—		—		(10)		—		(10)
Interest expense	—		—		—		—		(148)		—		(148)
Income/(loss) before income taxes	381		(346)		142		(115)		(215)		—		(153)
Income tax benefit	—		—		—		—		(49)		—		(49)
Net income/(loss)	$	381	$	(346)	$	142	$	(115)	$	(166)	$	—	$	(104)
(a) Inter-segment sales and inter-segment net derivative gains and losses included in revenues	$	6	$	2	$	2	$	—	$	—	$	—	$	10

Other segment information
Capital expenditures	$	337	$	5	$	4	$	7	$	25	$	—	$	378



	Six months ended June 30, 2026
(In millions)	Texas(a)		East(a)		West/Other		Vivint Smart Home		Corporate		Eliminations		Total
Revenue(b)	$	5,140	$	9,944	$	1,508	$	1,165	$	—	$	(20)	$	17,737
Operating expenses	4,591		8,958		1,335		600		80		(20)		15,544
Depreciation and amortization	231		236		15		416		28		—		926

Total operating cost and expenses	4,822		9,194		1,350		1,016		108		(20)		16,470
(Loss)/Gain on sale of assets	—		(6)		43		—		—		—		37
Operating income/(loss)	318		744		201		149		(108)		—		1,304


Other income, net	—		—		(1)		(3)		50		—		46
Loss on debt extinguishment	—		—		—		—		(9)		—		(9)
Interest expense	—		—		—		—		(595)		—		(595)
Income/(loss) before income taxes	318		744		200		146		(662)		—		746
Income tax expense	—		—		—		—		115		—		115



Net income/(loss)	$	318	$	744	$	200	$	146	$	(777)	$	—	$	631
(a) Includes result of operations following the acquisition date of the LSP Portfolio of January 30, 2026
(b) Inter-segment sales and inter-segment net derivative gains and losses included in revenues	$	18	$	1	$	1	$	—	$	—	$	—	$	20

Other segment information
Capital expenditures	$	544	$	41	$	4	$	13	$	53	$	—	$	655



	Six months ended June 30, 2025
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate		Eliminations		Total
Revenue(a)	$	5,281	$	7,315	$	1,714	$	1,033	$	—	$	(18)	$	15,325
Operating expenses	4,386		6,887		1,483		705		71		(18)		13,514
Depreciation and amortization	176		73		18		381		22		—		670

Total operating cost and expenses	4,562		6,960		1,501		1,086		93		(18)		14,184
Loss on sale of assets	—		—		(7)		—		—		—		(7)
Operating income/(loss)	719		355		206		(53)		(93)		—		1,134


Other income, net	(1)		4		2		(8)		22		—		19
Loss on debt extinguishment	—		—		—		—		(10)		—		(10)
Interest expense	—		—		—		—		(311)		—		(311)
Income/(loss) before income taxes	718		359		208		(61)		(392)		—		832
Income tax expense	—		—		—		—		186		—		186



Net income/(loss)	$	718	$	359	$	208	$	(61)	$	(578)	$	—	$	646
(a) Inter-segment sales and inter-segment net derivative gains and losses included in revenues	$	13	$	1	$	4	$	—	$	—	$	—	$	18

Other segment information
Capital expenditures	$	527	$	5	$	7	$	8	$	48	$	—	$	595

The following table summarizes balance sheet information by segment:


	As of June 30, 2026
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate		Eliminations		Total

Goodwill(a)	$	2,231	$	2,935	$	126	$	3,523	$	—	$	—	$	8,815
Total assets	14,516		23,472		2,829		7,072		29,809		(37,758)		39,940
(a) The goodwill associated with the acquisition of the LSP Portfolio has been preliminarily allocated to the Texas and East segments as of June 30, 2026

	As of December 31, 2025
(In millions)	Texas		East		West/Other		Vivint Smart Home		Corporate		Eliminations		Total

Goodwill	$	643	$	721	$	130	$	3,523	$	—	$	—	$	5,017
Total assets	9,286		9,731		2,724		6,752		20,951		(20,304)		29,140

Note 12 — Income Taxes

Effective Income Tax Rate

The income tax provision consisted of the following:


	Three months ended June 30,						Six months ended June 30,
(In millions, except rates)	2026			2025			2026			2025
Income/(Loss) before income taxes	$	663		$	(153)		$	746		$	832
Income tax expense/(benefit)	157			(49)			115			186

Effective income tax rate	23.7		%	32.0		%	15.4		%	22.4		%

For the three months ended June 30, 2026, the effective tax rate was higher than the statutory rate of 21%, primarily due to the state tax expense, partially offset with favorable permanent differences. For the six months ended June 30, 2026 the effective tax rate was lower than the statutory rate of 21%, primarily due to favorable permanent differences related to stock-based compensation and the remeasurement of state net operating losses as a result of the acquisition of the LSP Portfolio.

For the three months ended June 30, 2025, the effective tax rate was higher than the statutory rate of 21%, primarily due to the state tax benefit and permanent differences. For the six months ended June 30, 2025, the effective tax rate was higher than the statutory rate of 21%, primarily due to the state tax expense, partially offset with favorable permanent differences.

On July 4, 2025, H.R.1 - One Big Beautiful Bill Act (“OBBB”) was enacted into law. The OBBB includes changes to U.S. tax law applicable to NRG beginning in 2025. The impact of the OBBB on the Company’s condensed consolidated financial statements has been reflected in its current and deferred taxes, however, there is no material impact to the income tax expense/(benefit) for the periods presented.

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 regulations and new guidance. NRG as an applicable corporation is subject to the CAMT, however, there is no impact on the Company’s provision for income taxes from the CAMT for the three and six months ended June 30, 2026 and 2025.

Uncertain Tax Benefits

As of June 30, 2026, NRG had a non-current tax liability of $53 million for uncertain tax benefits from positions taken on various federal, state, and foreign income tax returns inclusive of accrued interest. For the six months ended June 30, 2026, NRG accrued $1 million of interest relating to the uncertain tax benefits. As of June 30, 2026, NRG had cumulative interest and penalties related to these uncertain tax benefits of $5 million. The Company recognizes interest and penalties related to uncertain tax benefits in income tax expense.

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 2022. With few exceptions, state and Canadian income tax examinations are no longer open for years prior to 2015.

Note 13 — Related Party Transactions

NRG provides services to some of its related parties, which 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 services, 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:


	Three months ended June 30,				Six months ended June 30,
(In millions)	2026		2025		2026		2025
Revenues from Related Parties Included in Revenue
Gladstone	$	—	$	—	$	1	$	1

Ivanpah(a)	14		12		35		24



Total	$	14	$	12	$	36	$	25

(a)Also includes fees under project management agreements with each project company

Note 14 — Commitments and Contingencies

Commitments

The Company disclosed its commitments in Note 22, Commitments and Contingencies, to the Company’s 2025 Form 10-K. As of June 30, 2026, the Company has entered into additional long-term contractual arrangements related to purchased energy commitments, including power purchases, gas transportation and storage, and fuel and transportation services. These contracts are not included in the consolidated balance sheet as of June 30, 2026.

As of June 30, 2026, the Company’s minimum commitments under such additional outstanding agreements are estimated as follows:


Period	(In millions)
2026	$	20
2027	638
2028	565
2029	502
2030	378
Thereafter	625
Total	$	2,728

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 June 30, 2026, counterparties’ net exposure to NRG of approximately $255 million on out-of-the-money hedges was secured by the first lien structure.

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 believes it has established an adequate accrual for the applicable legal matters, including regulatory and environmental matters as further discussed in Note 15, Regulatory Matters, and Note 16, 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”) and smart home companies 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, electricity or smart home solutions.

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 breached its contractual duty to set customer variable rates based on actual and estimated supply costs. 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 is considering whether class certification is still appropriate. Recently, this matter was moved to a new judge for further handling. A trial setting has not yet been scheduled. This matter was known and accrued for at the time of the XOOM acquisition.

Telephone Consumer Protection Act (“TCPA”) Case

Matthew Dickson v. Direct Energy (N.D. Ohio Jan. 2018) — The Company is currently defending a putative class action involving 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 Company denies the allegations asserted by plaintiffs and intends to vigorously defend this matter. This matter was known and accrued for at the time of the Direct Energy acquisition. This 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 and the case was sent back to the trial court. The parties conducted fact and expert discovery and Direct Energy submitted its motion for summary judgment in August 2024. On December 16, 2025, the Court granted summary judgment in favor of Direct Energy. The Court subsequently entered default judgments against the remaining two defendants. Dickson timely filed their appeal.

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 retail electric provider. 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 retail electric providers 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 to the Texas Supreme Court. On March 27, 2026, the Texas Supreme Court denied review of the plaintiffs’ appeal. NRG awaits the trial court’s application of the dismissal across all of the cases filed against the generators. The Company will continue to vigorously defend these matters.

Note 15 — Regulatory Matters

Environmental regulatory matters are discussed within Note 16, 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 proceeding 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.

NYSPSC – Order to Show Cause — The NYSPSC issued an order referred to as the Retail Reset Order in December 2019 that limited the offers of ESCOs 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. Subsequently, the NYSPSC issued an order referred to as the Clarification Order on

September 18, 2020 stating the Retail Reset Order applies only to prospective customer contracts. 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. NRG responded to the notices in February 2024 and on September 23, 2025, the NYSPSC issued a follow-up order further alleging separately that the NRG retail supplier responsible for selling natural gas to commercial and industrial customers had been improperly serving residential customers. On April 16, 2026, the NYSPSC approved a settlement agreement which resolved all outstanding claims and permitted NRG to maintain its eligibility to serve customers. The agreement requires NRG to: (i) establish a $50 million fund for distribution to certain legacy customers; (ii) offer those same customers a one-time opportunity to enroll on a special discounted 12-month rate; and (iii) distribute approximately $920 thousand to certain low-income customers. This matter was accrued for as of June 30, 2026.

Note 16 — Environmental Matters

NRG is subject to numerous 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. In general, the electric generation industry has faced increasingly stringent requirements regarding air quality, GHG emissions, combustion byproducts, water use and discharge, and threatened and endangered species including several rules promulgated in 2024. Future laws may 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. At the federal level, the President has issued several Executive Orders that indicate that the current administration intends to relax or rescind some previously promulgated regulations. The EPA has proposed several and finalized some rules that relax and/or rescind regulations previously promulgated. 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. On January 19, 2021, the U.S. Court of Appeals for the D.C. Circuit (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. 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 would 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 D.C. Circuit held oral arguments related to this rule in December 2024. In February 2025, the court granted a motion the DOJ filed asking the court to hold proceedings in abeyance while the EPA evaluates the rule. On June 17, 2025, the EPA proposed to repeal all GHG emission standards for fossil fuel-fired power plants under Section 111 of the CAA. The EPA is proposing to conclude that GHG emissions from domestic fossil fuel-fired EGUs do not contribute to dangerous air pollution at a level sufficient to invoke the EPA’s authority under CAA Section 111. In addition to its primary proposal to repeal all GHG emission standards for the power sector promulgated in both 2015 and 2024, the EPA has included an alternative proposal to repeal only specific portions. The Company believes that the EPA may amend such regulations this year.

Cross-State Air Pollution Rule (“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 (a Federal Implementation Plan or “FIP”) 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 (the “Fifth Circuit”) stayed the EPA’s disapproval of Texas’s and Louisiana’s state plans, which disapprovals are a condition precedent to the EPA imposing its plan on Texas and Louisiana. On March 25, 2025, the Fifth Circuit upheld the EPA’s disapproval of Texas’s and Louisiana’s state plans but did not address the FIP. On May 9, 2025, Texas and other parties petitioned the Fifth Circuit for a rehearing with the whole court. On March 13, 2026, the Fifth Circuit issued a revised opinion vacating and remanding the EPA’s disapproval of Texas’s interstate transport plan. On June 5, 2023, the EPA promulgated the FIP. On June 27, 2024, the U.S. Supreme Court stayed the FIP in the 11 states where the rule had not already been stayed. On April 14, 2025, the D.C. Circuit granted the EPA’s request to hold the legal challenges in abeyance while the EPA revisits the rule. On January 30, 2026, the EPA proposed a Phase 1 reconsideration rule covering Alabama, Arizona, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Nevada, New Mexico and Tennessee. The EPA intends to address additional states in a separate action. The Company cannot predict the outcome of the legal challenges to the various state disapprovals and the final rule promulgated on June 5, 2023.

Regional Haze — 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. The Company does not expect this proposal to be finalized during the current U.S. presidential administration. On December 5, 2025, the EPA approved Texas’s plans to address the Regional Haze rule.

Mercury and Air Toxics Standards (“MATS”) — On May 7, 2024, the EPA promulgated a final rule that amended 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 had been 2027. On April 8, 2025, the President signed a Proclamation that created a 2-year exemption for compliance beginning on July 8, 2027 and ending on July 8, 2029 for certain coal units including those owned by the Company. Twenty-three states have challenged this rule in the D.C. Circuit. On February 24, 2026, the EPA promulgated a final rule repealing the majority of the 2024 rule amending the MATS rule, which also has been challenged in the D.C. Circuit.

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 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 intended 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, which the Company completed by the end of 2025. However, PJM has requested that two coal-fueled units at Powerton continue to operate until at least September 2030 to address reliability concerns. On May 9, 2024, the EPA promulgated a rule that again 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 were consolidated in the U.S. Court of Appeals for the Eighth Circuit. 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 U.S. presidential administration evaluates the rule, which the court granted. On December 31, 2025, the EPA promulgated a rule that extends several deadlines and provides greater flexibility regarding decisions to invest in more stringent controls.

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 Closure 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) coal combustion residual (“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. On February 10, 2026, the EPA promulgated a rule extending certain deadlines in the 2024 rule. On April 13, 2026, the EPA proposed further amendments to the CCR that if finalized would provide industry greater compliance flexibility. The rule has been challenged in the D.C. Circuit and the outcome of the legal challenges is uncertain.

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