CONDENSED CONSOLIDATED STATEMENT OF INCOME NRG ENERGY, INC. AND SUBSIDIARIES Year ended December 31 IN THOUSANDS, EXCEPT PER SHARE AMOUNTS 2001 2000 1999 Operating Revenues and Equity Earnings Revenues from majority-owned operations $2,798,608 $2,018,622 $432,518 Equity in earnings of unconsolidated affiliates 210,032 139,364 67,500 Total operating revenues and equity earnings 3,008,640 2,157,986 500,018 Operating Costs and Expenses Cost of majority-owned operations 1,855,631 1,289,471 269,900 Depreciation and amortization 212,493 122,953 37,026 General, administrative and development 225,694 172,489 83,572 Total operating costs and expenses 2,293,818 1,584,913 390,498 Operating Income 714,822 573,073 109,520 Other Income (Expense) Minority interest in earnings of consolidated subsidiaries (6,564) (11,335) (2,456) Gain on sale of interest in projects - - 10,994 Other income, net 34,084 7,857 6,432 Interest expense (443,734) (293,922) (93,376) Total other expense (416,214) (297,400) (78,406) Income Before Income Taxes 298,608 275,673 31,114 Income Tax Expense (Benefit) 33,404 92,738 (26,081) ------------------------------------------------------------ ---------- --------- Net Income $ 265,204 $ 182,935 $ 57,195 ------------------------------------------------------------ ---------- --------- Weighted Average Number of Common Shares Outstanding-Basic 194,929 165,861 147,605 Earnings per Weighted Average Common Share-Basic $ 1.36 $ 1.10 $ 0.39 Weighted Average Number of Common Shares Outstanding-Diluted 196,439 166,989 147,605 Earnings per Weighted Average Common Shares-Diluted $ 1.35 $ 1.10 $ 0.39 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS NRG ENERGY, INC. AND SUBSIDIARIES YEAR ENDED DECEMBER 31, IN THOUSANDS 2001 2000 1999 Cash Flows From Operating Activities Net income $ 265,204 $ 182,935 $ 57,195 Adjustments to reconcile net income to net cash provided by (used in) operating activities Undistributed equity in earnings of unconsolidated affiliates (119,002) (43,258) (27,181) Depreciation and amortization 212,493 122,953 37,026 Deferred income taxes and investment tax credits 45,556 38,458 (3,401) Unrealized (gains)/losses on energy contracts (13,257) - - Minority interest 6,564 4,993 857 Gain on sale of investments - - (10,994) Cash (used in) provided by changes in certain working capital items, net of effects from acquisitions and dispositions (121,544) 55,597 (64,882) Net Cash Provided by (Used in) Operating Activities 276,014 361,678 (11,380) Cash Flows from Investing Activities Acquisitions, net of liabilities assumed (2,813,117) (1,912,957) (1,519,365) Consolidation of equity subsidiaries - - 20,181 Proceeds from sale of investments 4,063 8,917 43,500 Decrease/(increase) in restricted cash (99,707) 5,306 (13,067) Decrease/(increase) in notes receivable 45,091 (5,444) 58,331 Capital expenditures (1,322,130) (223,560) (94,853) Proceeds from sale of property - 9,785 - Investments in projects (149,841) (86,195) (163,340) Net Cash Used by Investing Activities (4,335,641) (2,204,148) (1,668,613) Cash Flows From Financing Activities Net (payments)/borrowings under line of credit agreements 202,000 (367,766) 216,000 Proceeds from issuance of stock 475,464 453,719 - Proceeds from issuance of corporate units 4,080 - - Capital contributions from parent - - 250,000 Proceeds from issuance of long-term debt 3,268,017 3,034,909 575,633 Proceeds from issuance of short-term debt 622,156 - 682,096 Principal payments on long-term debt (418,171) (1,214,992) (18,634) Net Cash Provided by Financing Activities 4,153,546 1,905,870 1,705,095 Effect of Exchange Rate Changes on Cash and Cash Equivalents (3,055) 360 - Net Increase in Cash and Cash Equivalents 90,864 63,760 25,102 Cash and Cash Equivalents at Beginning of Year 95,243 31,483 6,381 Cash and Cash Equivalents at End of Year $ 186,107 $ 95,243 $ 31,483 CONDENSED CONSOLIDATED BALANCE SHEET NRG ENERGY, INC. AND SUBSIDIARIES AS OF DECEMBER 31, IN THOUSANDS 2001 2000 Assets Current Assets Cash and cash equivalents $ 186,107 $ 95,243 Restricted cash 161,842 12,135 Accounts receivable-trade, less allowance for doubtful accounts of $33,962 and $21,199 346,154 360,075 Income tax receivable 28,118 - Inventory 331,323 174,864 Current portion of notes receivable 737 267 Derivative instruments valuation-at market 54,934 - Prepayments and other current assets 78,142 30,074 Total current assets 1,187,357 672,658 Property, Plant and Equipment, at Original Cost In service 7,005,680 4,106,653 Under construction 2,942,993 206,992 Total property, plant and equipment 9,948,673 4,313,645 Less accumulated depreciation (516,454) (271,977) Net property, plant and equipment 9,432,219 4,041,668 Other Assets Equity investments in affiliates 1,050,510 973,261 Capitalized project costs 2,581 10,262 Notes receivable, less current portion 775,865 76,745 Decommissioning fund investments 4,336 3,863 Intangible assets, net of accumulated amortization of $15,311 and $8,951 97,133 101,570 Debt issuance costs, net of accumulated amortization of $17,250 and $6,443 110,708 48,773 Derivative instruments valuation-at market 179,605 - Other assets, net of accumulated amortization of $13,323 and $10,628 54,231 50,192 Total other assets 2,274,969 1,264,666 Total Assets $12,894,545 $5,978,992 CONDENSED CONSOLIDATED BALANCE SHEET NRG ENERGY, INC. AND SUBSIDIARIES AS OF DECEMBER 31, IN THOUSANDS 2001 2000 Liabilities and Stockholders' Equity Current Liabilities Current portion of project level long-term debt $ 500,154 $ 146,469 Revolving line of credit 170,000 8,000 Revolving line of credit, non-recourse debt 40,000 - Project-level, non-recourse debt 22,156 - Corporate-level, recourse debt 600,000 - Accounts payable-trade 330,471 255,917 Accounts payable-affiliate 16,867 7,191 Accrued income taxes - 43,870 Accrued property, sales and other taxes 14,585 10,531 Accrued salaries, benefits and related costs 40,043 24,830 Accrued interest 96,479 51,962 Derivative instruments valuation-at market 21,910 - Other current liabilities 97,939 14,220 Total current liabilities 1,950,604 562,990 Other Liabilities Project-level, long-term, non-recourse debt 4,871,432 2,146,953 Corporate level, long-term, recourse debt 2,972,400 1,503,896 Deferred income taxes 445,736 55,642 Post-retirement and other benefit obligations 75,455 83,098 Derivative instruments valuation-at market 51,520 - Other long-term obligations and deferred income 222,468 149,640 Minority interest 67,801 14,685 Total liabilities 10,657,416 4,516,904 Stockholders' Equity Class A-Common stock; $.01 par value; 250,000,000 shares authorized; 147,604,500 shares issued and outstanding 1,476 1,476 Common stock; $.01 par value; 500,000,000 shares authorized; 50,939,875 shares and 32,395,500 shares issued and outstanding at December 31, 2001 and 2000 509 324 Additional paid-in capital 1,713,984 1,233,833 Retained earnings 635,349 370,145 Accumulated other comprehensive income (114,189) (143,690) Total stockholders' equity 2,237,129 1,462,088 Total Liabilities and Stockholders' Equity $12,894,545 $5,978,992