01—Abstract
Summary
Summary of the 10-K/A filed April 30, 2010. Cited figures are marked; the original filing is the authoritative source.
This amendment to NRG Energy's 2009 annual report supplies the Part III information (directors, executive officers, compensation, security ownership, related-party transactions and auditor fees) that was not in the original filing, which the amendment references as filed February 23, 2010.
Leadership changed during the year: Robert C. Flexon left as Chief Financial Officer on November 3, 2009, director Gerald Luterman became Interim CFO, and Christian S. Schade, who joined in March 2010, is due to become CFO in early May 2010.
Howard Cosgrove serves as non-executive Chairman and David Crane as President and CEO. For 2009, the filing reports that both the Consolidated Adjusted Free Cash Flow and Consolidated Adjusted EBITDA targets were exceeded and reached maximum incentive levels. The AIP targets were $900 milliona of Adjusted Free Cash Flow and $2,320 million of Consolidated Adjusted EBITDA.
Mr. Crane's total 2009 compensation was $7,854,404,b including a $2,120,800 annual incentive payment and a one-time $200,000 bonus tied to the Reliant Energy acquisition and Exelon's unsolicited offer and proxy contest. The filing says the company's potential dilution rate was approximately 6.7% at year-end 2009 and its actual dilution rate was 4.3%. On ownership, the filing lists BlackRock, Inc. at 10.11%, FMR LLC at 8.28%, T.
Rowe Price Associates at 7.17% and Orbis at 6.05%. All directors and executive officers as a group held 1.33% of common stock. The filing reports no related person transactions for 2009, and KPMG LLP's total fees were $10,431 thousandc for 2009 versus $8,027 thousand for 2008.
02—Key points
Key Highlights
- 2009 AIP targets of $900 million Adjusted Free Cash Flow and $2,320 million Consolidated Adjusted EBITDA were both exceeded, reaching maximum payout levels.
- CEO David Crane's 2009 total compensation was $7,854,404, including a $1,100,000 salary and a $2,120,800 annual incentive payment.
- CFO transition: Robert C. Flexon departed November 3, 2009; Gerald Luterman is Interim CFO; Christian S. Schade is set to become CFO in early May 2010.
- Potential dilution rate was approximately 6.7% at end of 2009, with an actual dilution rate of 4.3% and a run rate of less than 1%.
- Five-percent holders reported include BlackRock (10.11%), FMR LLC (8.28%), T. Rowe Price (7.17%) and Orbis (6.05%); directors and executive officers as a group hold 1.33%.
- The Board is set at 14 directors in three staggered classes; the filing identifies Mr. Crane, Mr. Luterman and Mr. Hobby as not independent under NYSE standards.
- KPMG LLP audit fees were $8,840 thousand for 2009, with total fees of $10,431 thousand, and the filing reports no related person transactions for 2009.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, NRG Energy kept $0.11.
- Revenue$8.95B100.0%
- Cost of revenue−$5.32B59.5%
- Gross profit$3.63B40.5%
- Operating costs−$1.47B16.4%
- Operating income$2.16B24.1%
- Interest, other & tax−$1.22B13.6%
- Net income$942.0M10.5%
Where FY2009 revenue went
$8.95B- Cost of revenue: $5.32B, 59% of revenue
- Interest, other & tax: $1.22B, 14% of revenue
- Net income: $942.0M, 11% of revenue
- SG&A: $550.0M, 6.1% of revenue
- Other operating costs: $920.0M, 10% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2009filed April 30, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $8.95B$6.88B | +30.0% |
| Cost of Revenue | $5.32B$3.60B | +47.9% |
| Gross Profit | $3.63B$3.29B | +10.4% |
| SG&A Expenses | $550.00M$319.00M | +72.4% |
| Operating Expenses | $6.79B$4.61B | +47.3% |
| Operating Income | $2.16B$2.27B | −5.0% |
| Interest Expense | $634.00M$583.00M | +8.7% |
| Net Income | $942.00M$1.23B | −23.1% |
| EPS (Basic) | $3.70$4.98 | −25.7% |
| EPS (Diluted) | $3.44$4.43 | −22.3% |
| Shares Outstanding (Basic) | 246.00M235.00M | +4.7% |
| Shares Outstanding (Diluted) | 271.00M275.00M | −1.5% |
05—Questions
Frequently Asked Questions
Who leads NRG's board and management, and what changed in the finance leadership?
Howard E. Cosgrove is Chairman of the Board and David Crane is President and CEO. Robert C. Flexon left as CFO on November 3, 2009. Director Gerald Luterman became Interim CFO that day and will serve until early May 2010, when Christian S. Schade, who joined the company on March 29, 2010 as Executive Vice President, is to assume the CFO role.
How did NRG's 2009 incentive plan results compare with targets?
The filing states that the AIP targets were $900 million of Consolidated Adjusted Free Cash Flow and $2,320 million of Consolidated Adjusted EBITDA. Both targets were exceeded and the maximum payout levels were achieved. The Committee approved several adjustments, including a net reduction of $10 million to Adjusted Free Cash Flow performance versus target.
What was CEO David Crane's 2009 compensation?
The Summary Compensation Table reports total 2009 compensation of $7,854,404. This includes a $1,100,000 salary, a $200,000 special bonus, $2,142,646 in stock awards, $2,199,272 in option awards, a $2,120,800 annual incentive payment, and $37,518 in pension value change.
Are there any related-party transactions or independence concerns?
The filing states there were no related person transactions for the year ended December 31, 2009. The Board determined that Mr. Crane, Mr. Luterman (while serving as Interim CFO) and Mr. Hobby are not independent under NYSE standards. Mr. Hobby's sister-in-law is a partner at KPMG LLP. The Board judged the other business relationships with directors' companies to be immaterial.
How much did NRG pay its independent auditor?
KPMG LLP billed total fees of $10,431 thousand for 2009, compared with $8,027 thousand for 2008. Audit fees were $8,840 thousand, audit-related fees were $95 thousand and tax fees were $1,496 thousand.
06—Continue