XML 30 R17.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Changes in Capital Structure
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Changes in Capital Structure Changes in Capital Structure
As of June 30, 2024 and December 31, 2023, 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:
PreferredCommon
Issued and OutstandingIssuedTreasuryOutstanding
Balance as of December 31, 2023650,000 267,330,470 (59,199,520)208,130,950 
Shares issued under LTIPs— 1,499,546 — 1,499,546 
Shares issued under ESPP— — 145,562 145,562 
Shares repurchased — — (2,277,630)(2,277,630)
Retirement of treasury stock— (2,277,630)2,277,630 — 
Balance as of June 30, 2024650,000 266,552,386 (59,053,958)207,498,428 
Shares issued under LTIPs— 9,703 — 9,703 
Shares repurchased— — (1,127,232)(1,127,232)
Partial settlement of Capped Call Options— — (1,067)(1,067)
Retirement of treasury stock— (955,232)955,232 — 
Balance as of July 31, 2024
650,000 265,606,857 (59,227,025)206,379,832 
Common Stock
Share Repurchases
On June 22, 2023, NRG revised its long-term capital allocation policy to target allocating approximately 80% of cash available for allocation, after debt reduction, to be returned to shareholders. As part of the revised capital allocation framework, the Company announced an increase to its share repurchase authorization to $2.7 billion, to be executed through 2025. As of July 31, 2024, $1.4 billion is remaining under the $2.7 billion authorization. The following table summarizes the share repurchases made under the $2.7 billion authorization through July 31, 2024:
Total number of shares purchasedAverage price paid per shareAmounts paid for shares purchased (in millions)
2023 Repurchases:
Open market repurchases
5,054,798 $39.56 $200 
Repurchases made under the accelerated share repurchase agreements17,676,142 (b)950 
Total Share Repurchases during 202322,730,940 1,150 (a)
2024 Repurchases:
Repurchases made under the accelerated share repurchase agreements1,163,230 (b)— 
Open market repurchases
1,114,400 $80.76 90 
Total Share Repurchases during the six months ended June 30, 20242,277,630 $90 (c)
Open market repurchases July 1, 2024 through July 31, 2024
1,127,232 $76.27 86 
Total Share Repurchases under the $2.7 billion authorization
26,135,802 $50.73 $1,326 
(a)Excludes $10 million accrued for excise tax owed as of December 31, 2023
(b)Under the November 6, 2023 ASR, 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. See discussion below for further information of the ASR agreements
(c)Excludes $1 million accrued for excise tax owed as of June 30, 2024
On November 6, 2023, the Company executed Accelerated Share Repurchase agreements to repurchase a total of $950 million of NRG's outstanding common stock based on volume-weighted average prices. The Company received 17,676,142 shares in the fourth quarter of 2023, which were recorded in treasury stock at fair value based on the closing prices of $833 million, with the remaining $117 million recorded in additional paid-in-capital, representing the value of the forward contracts to purchase additional shares. During the first quarter of 2024, the Company received an additional 1,163,230 shares pursuant to the ASR agreements. Upon receipt of the final shares, the Company transferred the $117 million from additional paid-in-capital to treasury stock.
Employee Stock Purchase Plan
The Company offers participation in the ESPP which allows eligible employees to elect to withhold between 1% and 10% of their eligible compensation to purchase shares of NRG common stock at the lesser of 90% of its market value on the offering date or 90% of the fair market value on the exercise date. An offering date occurs each April 1 and October 1. An exercise date occurs each September 30 and March 31.
NRG Common Stock Dividends
During the first quarter of 2024, NRG increased the annual dividend to $1.63 from $1.51 per share and expects to target an annual dividend growth rate of 7%-9% per share in subsequent years. A quarterly dividend of $0.4075 per share was paid on the Company's common stock during the three months ended June 30, 2024. On July 19, 2024, NRG declared a quarterly dividend on the Company's common stock of $0.4075 per share, payable on August 15, 2024 to stockholders of record as of August 1, 2024.
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 2024, 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 retiredAverage price per shareCarrying value of treasury shares retired (in millions)
Shares retired during the first quarter of 20241,163,230 $32.67 $38 
Shares retired during the second quarter of 20241,114,400 33.84 38
Total shares retired during the six months ended June 30, 20242,277,630 $76 
Capped Call Options
During the second quarter of 2024, the Company entered into privately negotiated capped call transactions with certain counterparties (the "Capped Calls"). The Capped Calls each have a strike price of $41.32 per share, subject to certain adjustments, which correspond to the conversion price of the Convertible Senior Notes as of June 30, 2024. The Capped Calls have a cap price of $249.00 per share, subject to certain adjustments, and effectively lock in a conversion premium of $257 million on the remaining $232 million balance of the Convertible Senior Notes. The options will expire on June 1, 2025 if not exercised. The Capped Calls are separate transactions and not part of the terms of the Convertible Senior Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders' equity. The option price of $257 million incurred in connection with the Capped Calls, of which $253 million was recorded as a reduction to additional paid-in capital and a $4 million loss was recorded to other income, net to account for the change in the value of the Capped Calls during the calculation period which began on May 31, 2024 and concluded on June 28, 2024. The option price will be payable upon the earlier of settlement and expiration of the applicable Capped Calls.
Preferred Stock
Series A Preferred Stock Dividends
During the quarter ended March 31, 2024, the Company declared and paid a semi-annual 10.25% dividend of $51.25 per share on its outstanding Series A Preferred Stock, totaling $33 million.