NRG Investor Presentation

1
NRG Investor Presentation

• March 11, 2004

2
Safe Harbor Statement

This Investor Presentation contains
forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of
1934. Such forward-looking statements are subject
to certain risks, uncertainties and assumptions
and include, but are not limited to, expected
earnings, future growth and financial
performance, timing of debt maturities,
resolution of litigation and bankruptcy claims,
and asset sales, and typically can be identified
by the use of words such as expect, estimate,
anticipate, forecast, plan, believe and
similar terms. Although NRG believes that its
expectations are reasonable, it can give no
assurance that these expectations will prove to
have been correct, and actual results may vary
materially. Factors that could cause actual
results to differ materially from those
contemplated above include, among others, general
economic conditions, hazards customary in the
power industry, competition in wholesale power
markets, the volatility of energy and fuel
prices, failure of customers to perform under
contracts, changes in the wholesale power markets
and related government regulation, the condition
of capital markets generally, our ability to
access capital markets, our substantial
indebtedness and the possibility that we may
incur additional indebtedness, adverse results in
current and future litigation, and the amount of
proceeds from asset sales. NRG undertakes no
obligation to update or revise any
forward-looking statements, whether as a result
of new information, future events or otherwise.
The foregoing review of factors that could cause
NRGs actual results to differ materially from
those contemplated in the forward-looking
statements included in this Investor Presentation
should be considered in connection with
information regarding risks and uncertainties
that may affect NRG's future results included in
NRG's filings with the Securities and Exchange
Commission at www.sec.gov.
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NRG Investor Presentation

• March 11, 2004

4
Agenda

• Financial Results
• Fresh Start Accounting
• Current Objectives
• Financial Priorities
• Operational Priorities
• Organizational Priorities
• Conclusion

5
Financial Results

• Net Income of 2.8 billion recorded for period
  January 1, 2003 through December 5, 2003 due
  primarily to Fresh Start accounting adjustments.
  This is not comparable to post-emergence NRGs
  actual or potential operating performance.
• Net Income of 11 million from December 6 through
  December 31, 2003.
• 570 million of Adjusted EBITDA for period
  January 1, 2003 through December 31, 2003. See
  Appendix for reconciliation of EBITDA to net
  income.
• Adjusted EBITDA includes a full year of losses
  in respect to the CLP contract of 183 million.
• Equity earnings from West Coast Power Partnership
  of 117 million, primarily related to West Coast
  Powers sales agreement with the California
  Department of Water Resources (CDWR).
• Note There will be a substantial reduction to
  the Companys 2004 earnings due to amortization
  of this intangible asset to expense, as a result
  of the CDWR contract being recorded at NRGs
  partnership level due to Fresh Start accounting.

• Fresh Start Amortization and Depreciation
  Adjustments will have a significant impact on
  NRGs ongoing financial results.
• Fresh Start adjustments will not have any impact
  on future cash flows.

EBITDA represents net income before interest,
taxes, depreciation and amortization, as
adjusted.
6
Fresh Start Accounting Impact
Summary of Balance Sheet Changes

• Principal Changes
• Increase primarily due to 640 million
  receivable from Xcel Energy related to
  settlement agreement recorded.
• Decrease of 1.4 billion due to Fresh Start
  revaluation of PPE, reclassification of 146
  million in turbines to Other Assets, and asset
  dispositions and impairments during 2003.
• Decrease in assets held for sale of 562 million
  and equity investments of 207 million offset by
  contracts and emissions credits of 486 million
  recorded under Fresh Start accounting, and 250
  million in cash collateral deposit related to
  line of credit facility.
• Primarily due to discharge of debt and other
  liabilities of 6.0 billion, as part of POR.
• Long term debt increased by 2.44 billion due to
  new refinancing in December 2003.
• Increase in long term obligation liability of
  498 million due to out of market contracts as
  established in Fresh Start accounting.

7
Current Objectives Financial
8
Liquidity Current Status
( millions) Unrestricted Cash
December 31, 2003 March
3, 2004 Domestic Cash 431 649
International Cash 63 65
Subtotal Unrestricted Cash 494 714 Letter
of Credit Availability 248 150 Revolver
Availability 250 250 Subtotal
Unrestricted Availability 992
1,114 Restricted Cash Domestic 104
120 International 113 137 Subtotal
Restricted Cash 217 257 Total Cash
Availability
1,209 1,371
Positive change includes an Xcel Energy
settlement distribution of 125 million to NRG.
The Companys liquidity is substantial and
increasing.
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Liquidity Corporate Debt Maturities
The Company is not burdened by scheduled
principal repayments over the short to medium
term.
Less than 50 million of corporate recourse debt
due within 5 years.
10
Liquidity Credit Support for Commercial
Operations
March 3, 2004 Use of Collateral
( millions) Guarantees
13.0 Margin
6.1 Prepays / Deposits
45.5 Letters of Credit
38.4
Total 103.0

• Guarantees Credit support for Power Marketing
  bilateral agreements
• Margin Support for BGS auction dispatch, NYMEX
  trading and bilateral contracts
• Prepays/Deposits Support for BGS auction, PJM
  Interconnection, as well as fuel, transportation,
  and short term energy purchases
• Letters of Credit Underlying credit support for
  new marketing agreements

We are being selective in our extension of credit
to support hedging activities.
11
Current Objectives Operational
12
Operational 2003 Performance

• The Company stayed focused during Chapter 11 at
  ensuring strong operating performance
• Our assets were significant contributors to the
  restoration of power during the blackouts in
  the Northeast
• Successful overhauls during planned outages have
  improved reliability at all NRG core assets

Equivalent Availability is the total available
hours a unit is available in a year minus the
summation of all partial outage events in a year
converted to Equivalent Hours (EH) where EH is
partial megawatts lost divided by unit Net
Available Capacity times hours of each event and
the net of these hours is divided by hours in a
year to achieve Equivalent Availability Factor in
percent. In-Market Availability is a measure of
how successfully a generating plant captured the
revenue earning opportunities in the market over
a period of time.
13
Operational 2004 Hedging Activity
The Company has hedged a substantial portion of
its coal-fired generation since emergence
Economic Production is based upon generation
costs as compared to the monthly forward energy
and fuel curves for the balance of 2004
Equivalent Fuel Hedges are actual fuel hedges in
their native units that have been converted to
equivalent amounts of generation based upon plant
heat rates
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Operational Connecticut Update

• We are working aggressively with regulators to
  obtain capacity payments that provide a fair
  return on our Connecticut assets.
• Temporary Reliability-Must-Run (RMR) Agreements
  filed on January 16, 2004 for Devon, Montville
  and Middletown
• Devon 7 8 RMRs initially approved by FERC
• Middletown, Montville and Devon 11-14 RMRs filed
  in January
• Renewed OM and capital expenditure reimbursement
  account filed in February for all facilities
  except Devon 7 8 and Connecticut Jets
• Global settlement conference for all issues under
  way
• We support Locational Installed Capacity Market
  (LICAP)
• ISO-NE filed proposal on March 1, FERC to rule
  April 30
• ISO-NE proposed 5.34/kW-month for RMR facilities
• Seek long-term Power Purchase Agreements to
  support selective repowering of key facilities

To the extent that our assets are designated as
required to maintain reliability, we expect to
earn a fair return on our assets in Connecticut
15
Operational Asset Sales

• During 2003 NRG continued its efforts to sell
  certain non-strategic assets
• Eliminated in excess of 600 million in
  consolidated debt and received in excess of 190
  million in cash proceeds from asset dispositions
• We will continue to market certain non-strategic
  assets during 2004
• Pending dispositions include Loy Yang (Australia)
  and
• McClain (Oklahoma)
• Executed purchase agreements in connection with
  three smaller domestic assets

The Companys non-strategic sales program
continues without interruption
16
Current Objectives Organizational

• New CFO
• Expedited phase out of external advisers
• Redirected Management Team
• Restructured Corporate Organization

17
Conclusion

• Solid balance sheet
• No liquidity constraints
• Focused management team
• Fuel-diversified asset base
• Plants with locational advantages
• Dispatch Diversity
• Market Diversity

• NRG Competitive Advantages

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Questions and Answers
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Appendix EBITDA Reconciliation
The following table summarizes the calculation of
EBITDA and provides a reconciliation to net
income for the periods indicated
Predecessor
NRG Predecessor NRG
Predecessor NRG
For the period For the period
For the period (Dollars in
thousands) Jan. 1 to Dec. 31,
2002 Jan. 1 to Dec. 5, 2003 Dec. 6 to
Dec. 31, 2003 Net Income / (loss) (3,464,282)
2,766,445
11,025 Plus Income tax (benefit)/expense
(164,398) 16,621
(651) Interest expense
487,169 360,385
21,645 Depreciation
and amortization expense
240,722 245,887
13,041 EBITDA (a) (2,900,789)
3,389,338
45,060 Plus (Income)/loss on discontinued
operations, net of income tax 500,786
(15,678)
(544) Legal settlement
reorganization items
660,456 2,461 Restructuring and
impairment charges 2,749,630
237,575 Write downs and
losses on sales of equity method investments
200,472 147,124
Fresh
Start reporting adjustments
(3,895,541)
Adjusted EBITDA (b) 550,099
523,274 46,977 (a) EBITDA represents
net income before interest, taxes, depreciation
and amortization. We have provided EBITDA
estimates because we believe that debt-holders
frequently use EBITDA to analyze operating
performance and debt service capacity. EBITDA
has limitations as an analytical tool, and you
should not consider it in isolation, or as a
substitute for analysis of our operating results
to be reported under GAAP in our Form 10-K for
the year ended December 31, 2003. Some of these
limitations are EBITDA does not reflect our
cash expenditures, or future requirements for
capital expenditures, or contractual
commitments EBITDA does not reflect changes
in, or cash requirements for, our working capital
needs EBITDA does not reflect the significant
interest expense, or the cash requirements
necessary to service interest or principal
payments, on our debts Although depreciation
and amortization are non-cash charges, the assets
being depreciated and amortized will often have
to be replaced in the future, and EBITDA does not
reflect any cash requirements for such
replacements and Other companies in our
industry may calculate EBITDA differently than we
do, limiting its usefulness as a comparative
measure. Because of these limitations, EBITDA
should not be considered as a measure of
discretionary cash available to use to invest in
the growth of our business. We compensate for
these limitations by relying primarily on our
GAAP results and using EBITDA and Adjusted EBITDA
only supplementally. (b) Adjusted EBITDA is
presented as a further supplemental measure of
operating performance. Adjusted EBITDA is being
presented as NRG believes it may provide a better
reflection of operating performance due to the
impact on our GAAP earnings in 2003 of Fresh
Start accounting and unusual non-recurring
charges resulting primarily from our bankruptcy.
Adjusted EBITDA has limitations as an analytical
tool, and you should not consider it in
isolation, or as a substitute for analysis of our
operating results as reported under GAAP. You
are encouraged to evaluate each adjustment and
consider its appropriateness for supplemental
analysis. As an analytical tool, Adjusted EBITDA
is subject to all of the limitations applicable
to EBITDA.