Nature of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business and Basis of Presentation

General

NRG Energy, Inc., or NRG or the Company is a leading energy and smart home company powering a brighter, smarter future. The Company delivers gas, electricity, and smart home solutions to approximately 8 million residential customers (comprised of 6 million retail energy customers and 2 million smart home customers) in addition to large commercial and industrial, hyperscaler, and wholesale customers. Across the U.S. and Canada, 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, 2025, the Company’s core power and natural gas business consists of approximately 12 GW of competitive power generation, primarily in Texas, and a natural gas portfolio that serves approximately 1,800 MMDth annually.

The Company's business is segmented as follows:

•Texas, which includes all activity related to customer, plant and market operations in Texas, other than Cottonwood;

•East, which includes all activity related to customer, plant and market operations in the East;

•West/Services/Other, which includes the following assets and activities: (i) all activity related to customer, plant and market operations in the West and Canada, and (ii) activity related to the Cottonwood facility and other investments;

•Vivint Smart Home; and

•Corporate activities.

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 2024 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, 2025, and the results of operations, comprehensive income, cash flows and stockholders' equity for the three and six months ended June 30, 2025 and 2024.

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.

Presentation Adjustments

Beginning in the third quarter of 2024, the Company is recording the amortization of capitalized contracts costs within depreciation and amortization. This change, along with additional financial statement disclosures, is meant to address investor inquiries by enhancing transparency to easier match expenses with revenues. NRG previously recorded amortization of capitalized contract costs related to fulfillment in cost of operations and amortization of capitalized contract costs related to customer acquisition primarily in selling, general and administrative costs in the consolidated statements of operations.

The following table presents adjustments within the condensed consolidated statement of operations for the three and six months ended June 30, 2024 related to capitalized contract costs:


(In millions)	As Previously Presented		Presentation Adjustments		As Adjusted
Three months ended June 30, 2024
Cost of operations (excluding depreciation and amortization shown below)	$	4,356	$	(28)	$	4,328
Depreciation and amortization	285		75		360
Selling, general and administrative costs	592		(47)		545
Six months ended June 30, 2024
Cost of operations (excluding depreciation and amortization shown below)	$	10,041	$	(51)	$	9,990
Depreciation and amortization	553		140		693
Selling, general and administrative costs	1,183		(89)		1,094

The following table presents adjustments within the condensed consolidated statement of cash flows for the six months ended June 30, 2024 related to capitalized contract costs:


(In millions)	As Previously Presented		Presentation Adjustments		As Adjusted
Six months ended June 30, 2024
Cash flows from operating activities:
Amortization of capitalized contract costs	$	—	$	140	$	140
Changes in other working capital	(711)		(140)		(851)