Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Income tax provision from continuing operations

The income tax provision consisted of the following amounts:


	Year Ended December 31,
(In millions, except effective income tax rate)	2025			2024			2023
Current
U.S. Federal	$	(17)		$	55		$	26
State	49			82			84
Foreign	16			5			(12)
Total — current	48			142			98
Deferred
U.S. Federal	221			333			50
State	11			(134)			(61)
Foreign	(10)			(18)			(98)
Total — deferred	222			181			(109)




Total income tax expense/(benefit)	$	270		$	323		$	(11)
Effective income tax rate	23.8		%	22.3		%	5.2		%

Domestic and foreign components of income/(loss) before income tax (benefit)/expense

The following represented the domestic and foreign components of income/(loss) before income taxes:


	Year Ended December 31,
(In millions)	2025		2024		2023
U.S.	$	1,087	$	1,485	$	261
Foreign	47		(37)		(474)
Total	$	1,134	$	1,448	$	(213)

Reconciliation of the U.S. federal statutory rate to NRG's effective rate

Reconciliations of the U.S. federal statutory tax rate to NRG's effective tax rate were as follows:


	Year Ended December 31,
	2025

(In millions, except effective income tax rate)	Amount			Percent
Tax at federal statutory income tax rate	$	238		21.0	%
State and local income taxes, net of federal effect(a)	46			4.1	%


Nontaxable and nondeductible items:

Stock compensation	(41)			(3.6)	%

Excess executive compensation	29			2.6	%




Other	5			0.4	%






Foreign Reconciling Items:





Other foreign jurisdictions	(6)			(0.5)	%
Changes in prior year unrecognized tax benefit	(1)			(0.1)	%
Income tax expense	$	270		23.8	%
Effective income tax rate	23.8		%

(a) State taxes in Texas and Pennsylvania make up the majority (greater than 50 percent) of the tax effect in this category


	Year Ended December 31,
(In millions, except effective income tax rate)	2024			2023
Income/(Loss) before income taxes	$	1,448		$	(213)
Tax at federal statutory tax rate	304			(45)
State taxes	92			(22)
Foreign rate differential	1			(10)
Changes in state valuation allowances	(110)			42
Nondeductible loss on Convertible Senior Notes repurchases	56			—
Permanent differences	23			31
Stock compensation	(19)			—
Recognition of uncertain tax benefits	1			12


Deferred impact of state tax rate changes	(24)			3

Foreign tax refunds	—			(17)
Return to provision adjustments	(1)			(5)






Income tax expense/(benefit)	$	323		$	(11)
Effective income tax rate	22.3		%	5.2		%

Company's deferred tax assets and liabilities

The temporary differences, which gave rise to the Company's deferred tax assets and liabilities consisted of the following:


	As of December 31,
(In millions)	2025		2024
Deferred tax assets:
U.S. Federal net operating loss carryforwards	$	1,395	$	1,477
State net operating loss carryforwards	326		341
Foreign net operating loss carryforwards	107		106
Deferred revenues	323		335
Difference between book and tax basis of property	101		322
Federal tax credit carryforwards	288		269
Deferred compensation, accrued vacation and other reserves	170		174
Interest disallowance carryforward per §163(j) of the Tax Act	26		77
Pension and other postretirement benefits	33		46
Allowance for credit losses	34		37
Equity compensation	44		30

Federal benefit on state uncertain tax positions	13		13

Inventory obsolescence	9		13
U.S. capital loss	1		1
Other	45		46

Total deferred tax assets	2,915		3,287
Deferred tax liabilities:
Intangibles amortization (excluding goodwill)	338		486
Derivatives	85		193
Capitalized contract costs	345		249
Equity method investments	84		88
Goodwill	71		56

Emissions allowances	14		16



Total deferred tax liabilities	937		1,088
Total deferred tax assets less deferred tax liabilities	1,978		2,199
Valuation allowance	(150)		(144)

Total net deferred tax assets, net of valuation allowance	$	1,828	$	2,055

Summary of NRG's net deferred tax position

The following table summarizes NRG's net deferred tax position as presented in the consolidated balance sheets:


	As of December 31,
(In millions)	2025		2024
Deferred tax asset	$	1,843	$	2,067

Deferred tax liability	(15)		(12)
Net deferred tax asset	$	1,828	$	2,055

Reconciliation of total amounts of uncertain tax benefits

The following table summarizes uncertain tax benefits activity:


	As of December 31,
(In millions)	2025		2024
Balance as of January 1	$	57	$	73
Increase due to current year positions	2		12


Settlements, payments and statute closure	(6)		(28)
Uncertain tax benefits as of December 31	$	53	$	57

Summary of Income Taxes Paid

The following table provides a reconciliation of cash and cash equivalents, restricted cash and funds deposited by counterparties reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the statements of cash flows.


	Year Ended December 31,
(In millions)	2025		2024		2023
Cash and cash equivalents	$	4,708	$	966	$	541
Funds deposited by counterparties	260		199		84
Restricted cash	30		8		24
Cash and cash equivalents, funds deposited by counterparties and restricted cash shown in the statements of cash flows	$	4,998	$	1,173	$	649

The following table summarizes income taxes paid, net of refunds:


	Year Ended December 31,
(In millions)	2025

U.S. state and local:
Texas	$	22
New York	10
California	7
Pennsylvania	7



Other	14
	$	60
Foreign:



Other	$	7

Total	$	67


	Year Ended December 31,
(In millions)	2024		2023
Income taxes paid, net of refunds	$	182	$	48

Detail of supplemental disclosures of cash flow and non-cash investing and financing information was:


	Year Ended December 31,
(In millions)	2025		2024		2023
Interest paid, net of amount capitalized	$	572	$	626	$	548
Non-cash investing and financing activities:
Decreases to fixed assets for accrued capital expenditures	(66)		(76)		—
Excise tax accrued on share repurchases	11		9		10