Second Quarter 2004 Financial Results Second Quarter 2004 Financial Results

August 5, 2004August 5, 2004

2

Safe Harbor StatementSafe 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 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, out 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 today’s date, August 5, 2004 and is based on assumptions believed to be reasonable as of this date. NRG disclaims any current intention to update such guidance. The foregoing review of factors that could cause NRG’s 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.

3

AgendaAgenda

Operational Update

Q2 Financial Results and Outlook

Q&A

Operational Update

Q2 Financial Results and Outlook

Q&A

4

Second quarter performanceSecond quarter performance

– Adjusted EBITDA of $232 million Adjusted EBITDA of $232 million

– Reported net income of $83 millionReported net income of $83 million

YTD performanceYTD performance

– Adjusted EBITDA of $489 millionAdjusted EBITDA of $489 million

– Reported net income of $113 millionReported net income of $113 million

– Free cash flow of $355 millionFree cash flow of $355 million

Financial Financial HighlightsHighlightsFinancial Financial HighlightsHighlights

5

Operating HighlightsOperating Highlights The Company exhibited continued strength in all

phases of operating performance:

– Safety 20% lower injury frequency rate than industry average with

continuing improvement

– Plant availability 96% in-market availability through May 2004

– Environmental Met and exceeded environmental standards for compliance with air, waste, and water regulations

– Summer Maintenance at 12 plants preparedness completed on time and within

budget

The Company exhibited continued strength in all phases of operating performance:

– Safety 20% lower injury frequency rate than industry average with

continuing improvement

– Plant availability 96% in-market availability through May 2004

– Environmental Met and exceeded environmental standards for compliance with air, waste, and water regulations

– Summer Maintenance at 12 plants preparedness completed on time and within

budget

6

We continue to make progress rationalizing We continue to make progress rationalizing nonsupported assets for value:nonsupported assets for value:

Asset Sales - 2004Asset Sales - 2004

NameName LocationLocation

Actual or expectedActual or expectedcash proceedscash proceeds

(Millions)(Millions)

Balance Balance Sheet Debt Sheet Debt

(Millions)(Millions) StatusStatus

Various $20 $45

Batesville

Others (4)*

Mississippi $27 $292 Executed PSA

Loy Yang A Australia $27 N/A Completed Q2

Cobee Bolivia $50 $24 Completed Q2

Calpine Cogen Various, U.S. $3 N/A Completed Q1

PERC Maine $18 $25 Completed Q2

Completed/PSA

TOTAL $145 $543

Oklahoma N/A $157McClain Completed Q3

* Others include Hsin Yu (Completed) and CALP (Executed PSA)

Connecticut UpdateConnecticut Update

MWMW RevenueRevenue

New RMRNew RMR 1,392 1,392 $5.10/kW-mo$5.10/kW-mo– MiddletownMiddletown– MontvilleMontville– Devon 11-14Devon 11-14

Devon 7 RMRDevon 7 RMR 107 107 $6.09/kW-mo$6.09/kW-mo(through (through

May)May)$10.15/kW-$10.15/kW-

momo(June-(June-

September)September)

Norwalk/CT JetsNorwalk/CT Jets 462 462 Market prices through Market prices through PUSH PUSH biddingbidding

8

8

California UpdateCalifornia Update

CPUC interim procurement order directed at CPUC interim procurement order directed at California utilitiesCalifornia utilities

Aging power plant study to be released, expected Aging power plant study to be released, expected to have a positive impactto have a positive impact

Continued dialogue with California utilities Continued dialogue with California utilities regarding 2005 and beyondregarding 2005 and beyond

CPUC interim procurement order directed at CPUC interim procurement order directed at California utilitiesCalifornia utilities

Aging power plant study to be released, expected Aging power plant study to be released, expected to have a positive impactto have a positive impact

Continued dialogue with California utilities Continued dialogue with California utilities regarding 2005 and beyondregarding 2005 and beyond

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Financial Financial ResultsResults

Financial Financial ResultsResults

10

Operating revenues 574 1,174

Gross margin 349683

Net income 83113

EBITDA 282529

Adjusted EBITDA 233489

Operating revenues 574 1,174

Gross margin 349683

Net income 83113

EBITDA 282529

Adjusted EBITDA 233489

$ millions$ millions

Key Financial HighlightsKey Financial Highlights

YTDYTDQ2Q2

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2nd Quarter 2004 Spark Spreads2nd Quarter 2004 Spark Spreads

Dark Gas Dual Fuel/Oil Spread1,2 Spread Spread

North America:

Gross Margin (000s) $71,220 $2,027 $7,351

Spark Spread $/MWh $25.03 $7.94 $43.61

Dark Gas Dual Fuel/Oil Spread1,2 Spread Spread

North America:

Gross Margin (000s) $71,220 $2,027 $7,351

Spark Spread $/MWh $25.03 $7.94 $43.61

11 Dark spread is the spread between energy prices and coal-fired generation costs Dark spread is the spread between energy prices and coal-fired generation costs22 Does not include LaGen contracted output Does not include LaGen contracted output

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NRG Generation by FuelNRG Generation by Fuel

0%

10%

20%

30%

40%

50%

60%

70%

80%

Coal Gas Dual

Capacity

MWhGenerated

22ndnd Quarter North American Generation by Fuel Type Quarter North American Generation by Fuel Type Versus Net North American Capacity OwnedVersus Net North American Capacity Owned

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EBITDA by Operating Segment - YTDEBITDA by Operating Segment - YTD

($ millions) Q2 Q2 Q2 Adj Q1 Adj YTD Adj

EBITDA Adj EBITDA EBITDA EBITDA

Northeast 79.2 .3 79.5 114.8 194.3

South Central 30.3 1.6 31.9 29.7 61.6

West Coast 54.9 -- 54.9 33.4 88.3

Other NA 23.2 (2.6) 20.6 12.3 32.9

International 48.2 (12.9) 35.2 54.2 89.4

Alt. Energy & Services 54.4 (38.9) 15.5 17.0 32.5

Corp – Unallocated (8.6) 3.5 (5.1) (4.5) (9.6)

Total 281.6 (49.0) 232.6 256.9 489.4

($ millions) Q2 Q2 Q2 Adj Q1 Adj YTD Adj

EBITDA Adj EBITDA EBITDA EBITDA

Northeast 79.2 .3 79.5 114.8 194.3

South Central 30.3 1.6 31.9 29.7 61.6

West Coast 54.9 -- 54.9 33.4 88.3

Other NA 23.2 (2.6) 20.6 12.3 32.9

International 48.2 (12.9) 35.2 54.2 89.4

Alt. Energy & Services 54.4 (38.9) 15.5 17.0 32.5

Corp – Unallocated (8.6) 3.5 (5.1) (4.5) (9.6)

Total 281.6 (49.0) 232.6 256.9 489.4

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Cash Flow YTDCash Flow YTD

$ in millions$ in millions Q1 ActualQ1 Actual Q2 ActualQ2 Actual YTDYTD

EBITDAEBITDA 246.9246.9 281.6281.6 528.5528.5

Interest PaymentsInterest Payments (31.1)(31.1) (81.6)(81.6) (112.7)(112.7)

Income TaxIncome Tax (3.0)(3.0) (27.5)(27.5) (30.5)(30.5)

Equity Earnings in Excess of Cash DistributionsEquity Earnings in Excess of Cash Distributions (30.9)(30.9) (26.2)(26.2) (57.1)(57.1)

Other Funds used by OperationsOther Funds used by Operations 10.810.8 (36.2)(36.2) (25.4)(25.4)

FFOFFO 192.7192.7 110.1110.1 302.8302.8

Working Capital ChangesWorking Capital Changes 25.025.0 (135.4)(135.4) (110.4)(110.4)

Xcel Settlement, netXcel Settlement, net 125.0125.0 ---- 125.0125.0

CFOCFO 342.7342.7 (25.3)(25.3) 317.4317.4

Asset DivestituresAsset Divestitures 3.03.0 85.985.9 88.988.9

CapExCapEx (35.0)(35.0) (29.7)(29.7) (64.7)(64.7)

Other Cash used by InvestingOther Cash used by Investing (2.0)(2.0) (20.6)(20.6) (22.6)(22.6)

FX Rate Changes & Disc Ops.FX Rate Changes & Disc Ops. 9.69.6 26.826.8 36.436.4

FCFFCF 318.3318.3 37.137.1 355.4355.4

Cash Used by FinancingCash Used by Financing (38.0)(38.0) (47.7)(47.7) (85.7)(85.7)

Net Cash FlowNet Cash Flow 280.3280.3 (10.6)(10.6) 269.7269.7

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LiquidityLiquidity

06/30/04 03/31/04

Unrestricted Cash:

Domestic 676 665

International 145 169

Restricted Cash:

Domestic 97 90

International 55 52

Total Cash 973 976

Letter of Credit Availability 118 137

Revolver Availability 250 250

Total Current Liquidity $1,341 $1,363

06/30/04 03/31/04

Unrestricted Cash:

Domestic 676 665

International 145 169

Restricted Cash:

Domestic 97 90

International 55 52

Total Cash 973 976

Letter of Credit Availability 118 137

Revolver Availability 250 250

Total Current Liquidity $1,341 $1,363

$ millions$ millions

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2004 EBITDA and FCF Outlook2004 EBITDA and FCF Outlook

$ in millions$ in millions ReportedReported

OutlookOutlook

AdjustmentAdjustment AdjustedAdjusted

OutlookOutlook

EBITDAEBITDA 837837 1313 850850

Interest PaymentsInterest Payments (278)(278) 1515 (263)(263)

Income TaxIncome Tax (36)(36) ---- (36)(36)

Other Cash Used by OperationsOther Cash Used by Operations (50)(50) ---- (50)(50)

FFOFFO 473473 2828 501501

Working Capital ChangesWorking Capital Changes (60)(60) ---- (60)(60)

Xcel Settlement, netXcel Settlement, net 100100 (100)(100) ----

CFOCFO 513513 (72)(72) 441441

Asset DivestituresAsset Divestitures 145145 (145)(145) ----

CapExCapEx (130)(130) ---- (130)(130)

Other Cash used by InvestingOther Cash used by Investing (7)(7) ---- (7)(7)

FCFFCF 521521 (217)(217) 304304

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($4.7) million($4.7) million100 bps100 bpsInterest ratesInterest rates

$35.7 million$35.7 million$1.00/mmbtu$1.00/mmbtuNatural GasNatural Gas

----$1.00/ton$1.00/tonCoalCoal

----$1.00/bbl$1.00/bblOilOil

Results in the Results in the following change tofollowing change to

2004 pre-tax income:2004 pre-tax income:Factor Factor

Increased by:Increased by:FactorsFactors

Sensitivities are for the remaining 6 months of 2004, Sensitivities are for the remaining 6 months of 2004, assuming current hedged positionsassuming current hedged positions

2004 Forecast Sensitivity Analysis2004 Forecast Sensitivity Analysis

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Enterprise ValueEnterprise Value

As of 6/30/04 As of 6/30/04 $ in millions$ in millions TotalTotal Nonsupported Nonsupported 11 SupportedSupported

Consolidated DebtConsolidated Debt $ 4,037$ 4,037 $ 1,003$ 1,003 $ 3,034$ 3,034

Unrestricted CashUnrestricted Cash 821821 3131 790790

Restricted CashRestricted Cash 152152 6363 8989

Total CashTotal Cash 973973 9494 879879

Net DebtNet Debt $ 3,064$ 3,064 $ 909$ 909 $ 2,155$ 2,155

Equity ValueEquity Value $ 2,700$ 2,700 -- $ 2,700$ 2,700

Enterprise ValueEnterprise Value $ 5,764$ 5,764 $ 909$ 909 $ 4,855$ 4,855

Forecasted Adjusted EBITDA Forecasted Adjusted EBITDA $ 850 $ 100 $ 850 $ 100

$ 750 $ 750

TEV / FY Adjusted EBITDATEV / FY Adjusted EBITDA 6.47x6.47x

1) Includes expected asset sales1) Includes expected asset sales

How we look at equity value:How we look at equity value:

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ConclusionConclusion

Continued focus on operating performance

Continued focus on rationalizing our businesses

Continued focus on maintaining strong leverage ratios

Continued focus on operating performance

Continued focus on rationalizing our businesses

Continued focus on maintaining strong leverage ratios

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Supplemental informationSupplemental information

22

Adjusted Net Income ReconciliationAdjusted Net Income Reconciliation

NRG ENERGY, INC. AND SUBSIDIARIES

Reconciliation of NonGAAP Financial Measures

Adjusted Net Income Reconciliation

Three Months Ended Three Months Ended

Predecessor

NRG YTD

(Dollars in thousands, except per share amounts) 6/ 30/ 03

Diluted EPS Diluted EPS Diluted EPS

Net Income / (Loss) $83,024 $0.83 (608,401)$ 30,235$ $0.30 113,259$ $1.13

Plus:

(Income) Loss from Discontinued Operations,

net of tax (2,257) (0.02) 97,285 865 $0.01 (1,392) (0.01)

(Gain) Loss from Discontinued Operations (11,898) (0.12) 2,066 - - (11,898) (0.12)

Corporate relocation charges, net of tax 3,692 0.04 - 737 $0.01 4,489 0.04

Reorganization items, net of tax (1,740) (0.02) 4,206 4,125 $0.04 2,383 0.02

Restructuring and impairment charges, net of tax 1,096 0.01 179,035 - - 1,113 0.01

FERC-authorized settlement with Connecticut Light

and Power, net of tax (25,085) (0.25) - - - (25,469) (0.25)

Write downs and (gains)/ losses on sales of equity

method investments, net of tax (788) (0.01) 87,937 1,147 $0.01 354 0.00

Adjusted net income $46,043 $0.46 (237,872)$ $37,109 $0.37 82,839$ $0.83

6/ 30/ 04

Reorganized NRG

6/ 30/ 04

Reorganized NRG

3/ 31/ 04

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Adjusted EBITDA ReconciliationAdjusted EBITDA Reconciliation

NRG ENERGY, INC. AND SUBSIDIARIES

Reconciliation of NonGAAP Financial Measures

Adjusted EBITDA Reconciliation

Reorganized NRG Predessor NRG Reorganized NRG YTD

(Dollars in thousands, except per share amounts) 6/ 30/ 04 6/ 30/ 03 3/ 31/ 04 6/ 30/ 04

Net Income / (Loss) $83,024 ($608,401) $30,235 $113,259

Plus:

Income Tax Expense 36,322 4,305 14,280 50,602

Interest expense, excluding amortization of

debt issuance costs and debt discount/

(premium) noted below 60,210 88,168 71,989 132,199

Depreciation and amortization 53,168 63,768 55,006 108,174

WCP CDWR contract amortization (included in

equity in earnings of unconsolidated affiliates) 30,638 - 30,968 61,606

Amortization of power contracts 8,614 - 16,965 25,579

Amortization of emission credits 3,648 - 6,270 9,918

Amortization of debt issuance costs

and debt discount/ (premium) 6,015 3,919 21,157 27,172

EBITDA $281,639 ($448,241) $246,870 $528,509

Plus:

(Income) Loss from Discontinued Operations,

net of Income taxes (2,257) 97,285 865 (1,392)

(Gain) Loss from Discontinued Operations (11,898) 2,066 - (11,898)

Corporate relocation charges 5,645 - 1,116 6,761

Reorganization items (2,661) 6,334 6,250 3,589

Restructuring and impairment charges 1,676 269,631 - 1,676

FERC-authorized settlement with Connecticut Light

and Power (38,357) - - (38,357)

Write downs and (gains)/ losses on sales of equity

method investments (1,205) 132,436 1,738 533

Adjusted EBITDA $232,582 $59,511 $256,839 $489,421

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GAAP Reconciliation (cont.)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 NRG’s 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 NRG’s 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.