NRG Energy: Past, Present and Future David Crane, President and Chief Executive Officer Robert Flexon, EVP and Chief Financial Officer

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NRG Energy Past, Present and FutureDavid Crane,
President and Chief Executive OfficerRobert
Flexon, EVP and Chief Financial Officer

• Deutsche Bank Global High-Yield Conference
• October 6, 2004
• Scottsdale, AZ

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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. Forward-looking statements are subject to
certain risks, uncertainties and assumptions and
typically can be identified by the use of words
such as expect, estimate, anticipate,
forecast, plan, believe and similar terms.
Such forward-looking statements include, but are
not limited to, expected earnings, future growth
and financial performance, the sufficiency in the
disputed claims reserve, the successful closing
of announced transactions, the successful closing
of the coal transportation agreement, the
successful implementation of our acquisition and
repowering strategy, the outcome of hearings on
our RMR agreements and cost tracker for scheduled
expenses. 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, unanticipated outages at
generation facilities, our ability to convert
facilities to western coal, our substantial
indebtedness and the possibility that we may
incur additional indebtedness, adverse results in
current and future litigation, delays in or
failure to meet closing conditions in announced
transactions, failure to identify or successfully
implement acquisitions and repowerings, the
amount of proceeds from asset sales and adverse
rulings on our RMR agreements and cost tracker
for scheduled expenses, resulting in us refunding
certain payments received to date. NRG
undertakes no obligation to update or revise any
forward-looking statements, whether as a result
of new information, future events or otherwise.
The adjusted EBITDA guidance is an estimate as of
August 5, 2004 and is based on assumptions
believed to be reasonable as of that date. NRG
disclaims any current intention to update such
guidance from August 5, 2004. 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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Agenda

• NRG in the Past
• NRG in the Present
• NRG in the Future

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NRG A Merchant Generator
We are a nonutility electric generation company
providing value through competitive markets.
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NRG History
New NRG
Old NRG
Xcel Energy completes tender offer to acquire
NRGs outstanding stock
Xcel subsidiary, NRG completes series of domestic
and international acquisitions leading to partial
IPO in June 2000.
NRG emerges from Chapter 11
With Kendall, Total Asset Sales 1 bn
Relisted on NYSE
1991-2001 2002 2003
2004 Year to Date
Confidence in energy industry falters post-Enron.
Energy prices fall.
Unable to serve debt accumulated through
acquisitions, NRG files under Chapter 11.
New CFO
04 Adj. EBITDA Guidance 850 mn
2.7 bn Exit Financing

• The old NRG committed the same blunders as the
  rest of the wholesale power industry
• Overpaid for acquisitions
• Overleveraged balance sheet
• Overextended via turbine orders
• Over hyped market prospects

• Emergence from Chapter 11 marks the birth of the
  new NRG, a very different company
• New balance sheet
• New strategy
• New management
• No legacy issues

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New NRG New Strategy
Leverage off the strength of the asset base
Northeast
West
Coal 2,407 MW30
Oil2,350 MW 30
Gas 693 MW 56
Dual Fuel 628 MW 44
Dual Fuel 2,284 MW 29
Gas842 MW 11
South Central
Gas 980 MW 40
Regional concentrations with fuel and
dispatch-level diversity
Coal 1,489 MW 60
Our Competitive Advantages Sizeable asset base in
the right markets Long-term contracts /
relationships with retail cooperatives in South
Central Locational advantage Healthy balance
sheet Flexibility to act in best interest of
stakeholders
Other North America includes 2,934 MW outside
of core regions
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The New NRG
New Management
No Legacy Issues

• New CEO and CFO
• Best practices approach to Corporate Governance
• Non-executive Chairman
• Board of Directors are independent
• All Directors selected by NRG Creditors Committee

• California settled
• CLP contract expired
• McClain sold
• Turbine purchase obligations resolved

Excluding CEO
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New NRG Post-emergence focus

• Objectives met
• Noncore assets continue to be sold
• Strong liquidity maintained
• Restructured corporate organization
• 2004 financial guidance provided
• Conversion of New York coal-fired plants to PRB
  and initial steps in Delaware

• Focus remains
• Building regional businesses with customer focus
• Increasing operational efficiencies in
  maintenance and fuel procurement
• Solving for California
• Allocating capital among shareholders, debt
  service and growth
• Strengthening trading and marketing platform

New NRG Significant progress since bankruptcy,
but plenty of work still remains
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New NRG - Early Returns are Good
While we plan and organize for the future, the
Company has stayed focused on delivering the
present
millions
YTD
Q2

• Operating revenues 574 1,174
• Gross margin 349 683
• Net income 83 113
• EBITDA 282 529
• Adjusted EBITDA 233 489
• Free Cash Flow 37 355

Full-year guidance for 2004 Adjusted EBITDA is
850 million
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Enterprise Value
How we look at equity value
As of 6/30/04 in millions Total Nonsupported 1 Supported
Consolidated Debt 4,037 1,003 3,034
Unrestricted Cash 821 31 790
Restricted Cash 152 63 89
Total Cash 973 94 879
Net Debt 3,064 909 2,155
Equity Value 2,700 - 2,700
Enterprise Value 5,764 909 4,855
Forecasted Adjusted EBITDA 850 100 850 100 750
TEV / FY Adjusted EBITDA TEV / FY Adjusted EBITDA 6.47x
Net Debt / FY Adj. EBITDA Net Debt / FY Adj. EBITDA 2.87x
1) Includes expected asset sales
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New NRG Balance Sheet Management
Portfolio Management

• Strengthening the Balance Sheet
• A 2004 Priority
• Targeted Unproductive Capital

Invested Capital
Net Debt
18 Decline in Capital
34 Decline in Net Debt

• Asset sales announced year-to-date also generated
  close to 150mn of cash proceeds
• Total liquidity now exceeds 1.6 billion
• Corporate maturities due over the next five years
  are less than 50 million in aggregate

1Full-year 2004 estimate 2Break-even at time of
sale
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NRG Performance
NRG versus Peer Group
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NRG Performance
Secondary Market Performance NRG versus Peer
Group
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NRG Working Towards a Super-Regional Business
Model

• We are transitioning NRG from a loose collection
  of power plants into three coherent regional
  businesses, each focused on developing as a
  foundation to their businesses, commercial
  relationships with the in-market retail load
  providers

West
South Central
Northeast
Region
60,000
50,000
180,000
Total MWs
1,321 (2,692 gross)
2,469
7,884
Our MWs
2 (4 gross)
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Market Share
Locational advantage
Base load coal /long term contracts
Base load coal
Principal Strength
Lack of capacitymarket
Shortfall of our generation relative to load we
serve
Reduction intransmission constraints
PrincipalVulnerability
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NRG Strategy Beyond Back to Basics
Extracting maximum value from existing fleet
Reinvestment in repowering of key assets
Northeast
WestCoast
SouthCentral
Selective acquisitions to fill out regional
lineups
Our Objective to be a multi-regional,
multi-fuel, scale generator with assets across
the merit order in each of our core regional
businesses and with the capability to procure,
transport and trade all of the commodities
involved in our business.
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Supplemental information
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Adjusted EBITDA Reconciliation
NRG ENERGY, INC. AND SUBSIDIARIES Reconciliation
of NonGAAP Financial Measures Adjusted EBITDA
Reconciliation
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2004 EBITDA and FCF Outlook
in millions Reported Outlook Adjustment Adjusted Outlook
EBITDA 837 13 850
Interest Payments (278) 15 (263)
Income Tax (36) -- (36)
Other Cash Used by Operations (50) -- (50)
FFO 473 28 501
Working Capital Changes (60) -- (60)
Xcel Settlement, net 100 (100) --
CFO 513 (72) 441
Asset Divestitures 145 (145) --
CapEx (130) -- (130)
Other Cash used by Investing (7) -- (7)
FCF 521 (217) 304


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GAAP Reconciliation (cont.)
EBITDA, Adjusted EBITDA and adjusted net income
are non-GAAP financial measures. These
measurements are not recognized in accordance
with GAAP and should not be viewed as an
alternative to GAAP measures of performance. The
presentation of Adjusted EBITDA and adjusted net
income should not be construed as an inference
that NRGs future results will be unaffected by
unusual or nonrecurring items. EBITDA represents
net income before interest, taxes, depreciation
and amortization. EBITDA is presented because NRG
considers it an important supplemental measure of
its performance and believe 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 as reported
under GAAP. Some of these limitations are
EBITDA does not reflect cash expenditures, or
future requirements for capital expenditures, or
contractual commitments EBITDA does not
reflect changes in, or cash requirements for,
working capital needs EBITDA does not reflect
the significant interest expense, or the cash
requirements necessary to service interest or
principal payments, on debts Although
depreciation and amortization are noncash
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 this industry may calculate EBITDA
differently than NRG does, 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 NRGs
business. NRG compensates for these limitations
by relying primarily on our GAAP results and
using EBITDA and Adjusted EBITDA only
supplementally. See the statements of cash flow
included in the financial statements that are a
part of this press release. Adjusted EBITDA is
presented as a further supplemental measure of
operating performance. Adjusted EBITDA represents
EBITDA adjusted for reorganization,
restructuring, impairment and corporate
relocation charges, discontinued operations, and
write downs and losses on the sales of equity
method investments factors which we do not
consider indicative of future operating
performance. The reader is encouraged to evaluate
each adjustment and the reasons NRG considers it
appropriate for supplemental analysis. As an
analytical tool, Adjusted EBITDA is subject to
all of the limitations applicable to EBITDA. In
addition, in evaluating Adjusted EBITDA, the
reader should be aware that in the future NRG may
incur expenses similar to the adjustments in this
presentation.