425
Filed by NRG Energy, Inc. pursuant to
Rule 425 of the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: NRG Energy, Inc.
Commission File No.: 001-15891
On March 2, 2009, David Crane, President and Chief Executive Officer of NRG Energy, Inc. (NRG),
issued the following letter to certain business partners and associates of NRG.
[NRG ENERGY, INC. LETTERHEAD]
March 2, 2009
February was an eventful month for NRG and, as your opinion is very important to NRG, I wanted to
keep you apprised of recent developments, including developments pertaining to Exelons attempts to
gain control of NRG.
First, let me put Exelons bid into context. Simply put, NRG is performing on all fronts. In
mid-February, we reported record adjusted EBITDA of $2.3 billion and record annual free cash flow
of $1.2 billion. In 2008, we achieved top decile safety performance and top quartile operational
reliability performance across our baseload fleet. We ended the year with $1.5 billion of cash on
hand and a total liquidity of $3.4 billion, which is especially strong given that as a result of
the general market dislocation our stock recently has been hovering around a market cap of just
over $5 billion. Looking forward, our baseload generation is heavily contracted for the next two
years meaning that we expect a 2009 financial year similar to what we achieved in 2008.
Rather than sit still in this capital constrained environment, NRG has begun to draw on its ample
liquidity to reshape our business to take advantage of the extraordinary opportunities available in
the marketplace. In the course of just the last seven days, NRG has announced the acquisition of
development rights for three large scale (500 megawatts total) solar thermal projects using eSolar
technology in California and New Mexico for approximately $10 million; the sale of our interest in
a German lignite mining operation for the euro equivalent of $259 million; and the acquisition of
Reliant Energys retail electricity operations and its 1.8 million retail, commercial and
industrial customers in Texas for $287.5 million in cash.
These are three entirely separate transactions, but taken together, they put us in a position to
increase our annual EBITDA by roughly $150 million/year net, and secure us a strong position to be
a first mover in large scale solar power development in the United States, all for a net increase
in invested capital of only $90 million. This series of transactions illustrates what NRG can
achieve and the opportunities we can act upon even in the current economic environment.
Last week, after its second exchange offer extension expired, Exelon announced that 51% of NRGs
shares had been tendered into their nonbinding offer. They intend to proceed to a proxy contest
through which they would seek to replace some of NRGs Board with their own nominees in the hope
and the expectation that they could force a sale of NRG to Exelon at a price that NRGs current
Board believes is inadequate. We believe the fact that roughly half of NRG stockholders
tendered into Exelons exchange offer, an offer that is clearly and substantially dilutive on a
cash flow basis to NRG stockholders, is a reflection of the extraordinarily difficult market
conditions that have roiled the investment community now for several months and that have
intensified over the past two weeks. It remains an open question whether Exelon will receive the
same level of support in a proxy contest where the vote for new Directors will be binding and could
have a real impact on the future of NRG.
We believe our stockholders share NRGs management and Board of Directors belief in industry
consolidation provided that it can be accomplished for an exchange of value that is fair to both
sets of stockholders. Accordingly, we are considering various strategic arrangements and
combinations.
In the meantime, we will not be deterred from building upon our track record of solid operating
performance, like we achieved in 2008, and on our various value-enhancing RepoweringNRG growth
initiatives in the areas of advanced nuclear, fast peakers, wind, solar, biomass and carbon capture
and sequestration, among others. With the eSolar, MIBRAG and Reliant Retail transactions last week,
NRG showed what it could achieve and I expect that you will be hearing more from us in the future.
Please feel free to contact me if you have any questions or concerns about the business that we are
doing together.
Sincerely yours,
/s/ David Crane
David Crane
Important Information
This communication does not constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of proxy of any stockholder of NRG Energy, Inc. (NRG). NRG plans to
file with the Securities and Exchange Commission (the SEC) and furnish to its stockholders a
proxy statement and white proxy card in connection with its 2009 Annual Meeting of Stockholders
(the 2009 Annual Meeting). INVESTORS AND STOCKHOLDERS OF NRG ARE URGED TO READ THE PROXY
STATEMENT FOR THE 2009 ANNUAL MEETING IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION.
In response to the exchange offer proposed by Exelon Corporation referred to in this news release,
NRG has filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9. STOCKHOLDERS
OF NRG ARE ADVISED TO READ NRGS SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 IN ITS
ENTIRETY BECAUSE IT CONTAINS IMPORTANT INFORMATION.
Investors and stockholders will be able to obtain free copies of NRGs proxy statement (when it
becomes available), the Solicitation/Recommendation Statement on Schedule 14D-9, any other
documents filed by NRG in connection with the exchange offer by Exelon Corporation, and other
documents filed with the SEC by NRG at the SECs website at www.sec.gov. Free copies of any such
documents can also be obtained by directing a request to Investor Relations Department, NRG Energy,
Inc., 211 Carnegie Center, Princeton, New Jersey 08540.
NRG and its directors and executive officers will be deemed to be participants in the solicitation
of proxies in connection with its 2009 Annual Meeting. Information regarding NRGs directors and
executive officers is available in its Annual Report on Form 10-K for the year ended December 31,
2008, which was filed with the SEC on February 12, 2009, and its proxy statement for its 2008
Annual Meeting of Stockholders, which was filed with the SEC on April 2, 2008. Detailed information
regarding the names, affiliations and interests of individuals who will participate in the
solicitation of proxies of NRGs stockholders will also be available in NRGs proxy statement for
the 2009 Annual Meeting.
Forward-Looking Statements
This communication contains forward-looking statements that may state NRGs or its managements
intentions, hopes, beliefs, expectations or predictions for the future. Such forward-looking
statements are subject to certain risks, uncertainties and assumptions, and typically can be
identified by the use of words such as will, expect, estimate, anticipate, forecast,
plan, believe and similar terms. 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, risks and uncertainties related to the capital markets
generally.
The foregoing review of factors that could cause NRGs actual results to differ materially from
those contemplated in the forward-looking statements included herein should be considered in
connection with information regarding risks and uncertainties that may affect NRGs future results
included in NRGs filings with the SEC at www.sec.gov. Statements made in connection with the
exchange offer are not subject to the safe harbor protections provided to forward-looking
statements under the Private Securities Litigation Reform Act of 1995.