SOURCE: RRI Energy

RRI Energy

May 06, 2010 08:00 ET

RRI Energy Reports First Quarter 2010 Results

HOUSTON, TX--(Marketwire - May 6, 2010) - RRI Energy, Inc. (NYSE: RRI)

-- Announced RRI Energy and Mirant merger of equals to create GenOn Energy
   -- Significant near-term value creation driven by $150 million annual
      cost savings
   -- Strengthened balance sheet and enhanced financial flexibility
   -- Increased scale and geographic diversity across regions
   -- Well positioned to benefit from improvement in market conditions
   -- Closing expected before the end of 2010
-- Captured additional $54 million in future forward capacity and PPA
   revenue
-- First quarter financial results reflect depressed commodity prices and
   weak economic conditions
-- Elrama and Niles power plant non-cash impairments totaling $248 million
   charged in first quarter

RRI Energy, Inc. today is reporting open EBITDA of $25 million for the first quarter of 2010, compared to $6 million for the first quarter of 2009. The improvement was primarily due to improved capacity prices and lower general and administrative costs. Adjusted EBITDA was $32 million in the first quarter of 2010, compared to $20 million in the first quarter of 2009. Free cash flow provided by continuing operations during the first quarter of 2010 was $61 million, compared to $45 million for the first quarter of 2009.

"Our recently announced merger with Mirant Corporation will create significant near term value for shareholders while preserving the fundamental value proposition of a recovery in commodity prices and supply and demand fundamentals," said Mark Jacobs, president and chief executive officer of RRI Energy. "Our focus continues to be on those items which we can control including operating the business efficiently and effectively, managing risk from the current weak market environment and positioning the business to create long-term value."

The loss from continuing operations before income taxes for the first quarter of 2010 was $214 million, compared to $140 million for the first quarter of 2009. The 2010 reported results include impairments of long-lived assets totaling $248 million, net unrealized gains from energy derivatives of $127 million and a $17 million charge for Western states litigation and similar settlements. The reported numbers for 2009 include net unrealized losses from energy derivatives of $44 million. Operating cash flow from continuing operations was $176 million for the first quarter of 2010, compared to $199 million for the first quarter of 2009.

Last year First Energy announced that it planned to move from the Midwest ISO to PJM in 2011. In connection with that move, three of RRI's power plants, Avon Lake, New Castle and Niles will also move to PJM. During the first quarter of 2010, PJM conducted integration capacity auctions for planning year 2011 and planning year 2012. For planning year 2011, RRI sold approximately 1,150 MW of capacity and for planning year 2012, RRI sold approximately 750 MW of capacity from those plants. The future forward capacity revenue from all capacity sold in the integration auctions totals approximately $54 million.

                        Open EBITDA Reconciliation

 ($ millions)                                            1Q2010    1Q2009
                                                        --------  --------
Loss from continuing operations before income taxes     ($   214) ($   140)
Unrealized (gains) losses on energy derivatives             (127)       44
Western states litigation and similar settlements             17       ---
Severance                                                    ---         1
Long-lived assets impairments                                248       ---
Depreciation and amortization                                 62        68
Interest expense, net                                         46        47
                                                        --------  --------
Adjusted EBITDA                                         $     32  $     20
Hedges and other items                                        (7)        4
Gains on sales of assets and emission and exchange
 allowances, net                                             ---       (18)
                                                        --------  --------
Open EBITDA                                             $     25  $      6


         Free Cash Flow from Continuing Operations Reconciliation

($ millions)                                             1Q2010    1Q2009
                                                        --------  --------
Operating cash flow from continuing operations          $    176  $    199
Change in margin deposits, net                               (97)     (106)
                                                        --------  --------
Adjusted cash flow provided by continuing operations    $     79  $     93
Maintenance capital expenditures                              (6)      (19)
Environmental capital expenditures and capitalized
 interest                                                    (12)      (36)
Emission and exchange allowances activity, net               ---         7
                                                        --------  --------
Free cash flow provided by continuing operations        $     61  $     45

Non-GAAP Financial Measures

This press release and the attached financial tables include the following non-GAAP financial measures:

-- EBITDA
-- Adjusted EBITDA
-- Open EBITDA
-- Adjusted cash flow provided by continuing operations
-- Free cash flow provided by continuing operations
-- Open energy gross margin
-- Other margin
-- Open gross margin
-- Total Controllable Costs
-- Total Controllable Costs/MWh
-- Total Controllable Costs/MW capacity
-- Gross debt
-- Net debt
-- Operation and maintenance, excluding severance
-- General and administrative, excluding severance

A reconciliation of these financial measures and the most directly comparable GAAP measures is included above or in the attached financial tables. Additional information regarding these measures, including a discussion of their usefulness and purpose, is included in the Form 8-K furnished along with this press release. Certain factors that could affect GAAP financial measures are not accessible on a forward-looking basis, but could be material to future reported earnings and cash flows.

Webcast Of Earnings Conference Call

RRI Energy will host its first quarter 2010 earnings conference call beginning at 10:00 a.m. Eastern Time on Thursday, May 6, 2010. The conference call will be webcast live with audio and slides at www.rrienergy.com in the investor relations section. A replay of the call can be accessed approximately two hours after the call's completion.

About RRI Energy, Inc.

RRI Energy, Inc. (NYSE: RRI) based in Houston, provides electricity to wholesale customers in the United States. The company is one of the largest independent power producers in the nation with more than 14,000 megawatts of power generation capacity across the United States. These strategically located generating assets use natural gas, fuel oil and coal. RRI routinely posts all important information on its web site at www.rrienergy.com.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that contain projections, estimates or assumptions about our revenues, income, capital structure and other financial items, our plans and objectives for future operations or about our future economic performance, possible transactions, dispositions, financings or offerings, and our view of economic and market conditions. In many cases you can identify forward-looking statements by terminology such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target" and other similar words. However, the absence of these words does not mean that the statements are not forward-looking.

Actual results may differ materially from those expressed or implied by forward-looking statements as a result of many factors or events, including, but not limited to, statements about the benefits of the proposed merger involving us and Mirant Corporation, including future financial position and operating results and the expected timing or ability to obtain necessary approvals and financing and to complete the merger, legislative, regulatory and/or market developments, the outcome of pending or threatened lawsuits, regulatory or tax proceedings or investigations, the effects of competition or regulatory intervention, financial and economic market conditions, access to capital, the timing and extent of changes in law and regulation (including environmental), commodity prices, prevailing demand and market prices for electricity, capacity, fuel and emission allowances, weather conditions, operational constraints or outages, fuel supply or transmission issues, hedging ineffectiveness and other factors we discuss or refer to in the "Risk Factors" sections of our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission. Our filings and other important information are also available on the Investor Relations page of our website at www.rrienergy.com.

Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

This news release contains non-GAAP measures as defined by the Securities and Exchange Commission rules. Reconciliations of these measures to the most directly comparable GAAP measures are contained herein or within our earnings release and the financial tables attached thereto, which are available, together with this news release, on our investors page at www.rrienergy.com. To the extent required, statements disclosing the utility and purposes of these measures are set forth in Item 2.02 to our current report on Form 8-K accompanying the earnings release, which is available on our web site.

Certain factors that could affect GAAP financial measures are not accessible on a forward-looking basis, but could be material to future reported earnings and cash flows.

Additional Information And Where To Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In connection with the proposed merger between RRI Energy and Mirant Corporation, RRI Energy will file with the SEC a Registration Statement on Form S-4 that will include a joint proxy statement of RRI Energy and Mirant that also constitutes a prospectus of RRI Energy. RRI Energy and Mirant will distribute the joint proxy statement/prospectus to their respective shareholders. RRI Energy and Mirant urge investors and shareholders to read the joint proxy statement/prospectus regarding the proposed merger when it becomes available, as well as other documents filed with the SEC, because they will contain important information. You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC's website (www.sec.gov). You may also obtain these documents, free of charge, from RRI Energy's website (www.rrienergy.com) under the tab "Investor Relations" and then under the heading "Company Filings." You may also obtain these documents, free of charge, from Mirant's website (www.mirant.com) under the tab "Investor Relations" and then under the heading "SEC Filings."

Participants In The Merger Solicitation

RRI Energy, Mirant, and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from RRI Energy and Mirant shareholders in favor of the merger and related matters. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of RRI Energy and Mirant shareholders in connection with the proposed merger will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find information about RRI Energy's executive officers and directors in its definitive proxy statement filed with the SEC on April 1, 2010. You can find information about Mirant's executive officers and directors in its definitive proxy statement filed with the SEC on March 26, 2010 and supplemented on April 28, 2010. Additional information about RRI Energy's executive officers and directors and Mirant's executive officers and directors can be found in the above-referenced Registration Statement on Form S-4 when it becomes available. You can obtain free copies of these documents from RRI Energy and Mirant using the contact information above.


                    RRI Energy, Inc. and Subsidiaries
                  Consolidated Statements of Operations




                                                      Three Months Ended
                                                          March 31,
                                                    ----------------------
                                                       2010        2009
                                                    ----------  ----------
                                                          (Unaudited)
                                                    (thousands of dollars,
                                                       except per share
                                                           amounts)

Revenues:
 Revenues (including $105,840 and $(4,288)
  unrealized gains (losses))                        $  604,710  $  466,184
                                                    ----------  ----------

Expenses:
 Cost of sales (including $21,263 and $(39,455)
  unrealized gains (losses))                           266,801     324,674
 Operation and maintenance                             160,415     157,146
 General and administrative                             20,718      29,014
 Western states litigation and similar settlements      17,000           -
 Gains on sales of assets and emission and exchange
  allowances, net                                         (417)    (18,930)
 Long-lived assets impairments                         247,715           -
 Depreciation and amortization                          62,320      67,858
                                                    ----------  ----------
   Total operating expense                             774,552     559,762
                                                    ----------  ----------
Operating Loss                                        (169,842)    (93,578)
                                                    ----------  ----------
Other Income (Expense):
 Interest expense                                      (46,041)    (46,919)
 Interest income                                           216         248
 Other, net                                              1,560         592
                                                    ----------  ----------
   Total other expense                                 (44,265)    (46,079)
                                                    ----------  ----------

Loss from Continuing Operations Before Income Taxes   (214,107)   (139,657)
 Income tax expense (benefit)                           62,084     (33,876)
                                                    ----------  ----------

Loss from Continuing Operations                       (276,191)   (105,781)
 Loss from discontinued operations                        (515)    (45,632)
                                                    ----------  ----------
Net Loss                                            $ (276,706) $ (151,413)
                                                    ==========  ==========

Basic/Diluted Loss Per Share:
 Loss from continuing operations                    $    (0.78) $    (0.30)
 Loss from discontinued operations                           -       (0.13)
                                                    ----------  ----------
 Net loss                                           $    (0.78) $    (0.43)
                                                    ==========  ==========

Weighted Average Common Shares Outstanding (in
 thousands):
  Basic                                                353,307     350,487
  Diluted                                              353,307     350,487


             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009




                    RRI Energy, Inc. and Subsidiaries
                     Results of Operations by Segment
                        and Adjusted and Open Data
                                (Unaudited)



                                                      Three Months Ended
                                                          March 31,
                                                    ----------------------
                                                     2010    2009   Change
                                                    ------  ------  ------
                                                    (millions of dollars)

East coal open gross margin (1)                     $  137  $  126  $   11
East gas open gross margin (1)                          49      39      10
West open gross margin (1)                              12      12       -
Other open gross margin (1)                              6      13      (7)
                                                    ------  ------  ------
  Total                                                204     190      14

Operation and maintenance, excluding severance        (160)   (156)     (4)
General and administrative, excluding severance        (21)    (29)      8
Other income, net                                        2       1       1
                                                    ------  ------  ------
   Open EBITDA                                          25       6      19
                                                    ------  ------  ------

Hedges and other items                                   7      (4)     11
Gains on sales of assets and emission and exchange
 allowances, net                                         -      18     (18)
                                                    ------  ------  ------
   Adjusted EBITDA                                      32      20      12
                                                    ------  ------  ------

Unrealized gains (losses) on energy derivatives        127     (44)    171
Western states litigation and similar settlements      (17)      -     (17)
Severance (2)                                            -      (1)      1
Long-lived assets impairments                         (248)      -    (248)
                                                    ------  ------  ------
   EBITDA                                             (106)    (25)    (81)
                                                    ------  ------  ------

Depreciation and amortization                          (62)    (68)      6
Interest expense, net                                  (46)    (47)      1
                                                    ------  ------  ------
Loss from continuing operations before income taxes $ (214) $ (140) $  (74)
                                                    ======  ======  ======



(1)  Segment profitability measure consists of open energy gross margin and
     other margin.
(2)  Includes severance classified in operation and maintenance expense.


             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009



                    RRI Energy, Inc. and Subsidiaries
                        Consolidated Balance Sheets


                                                   March 31,     December
                                                      2010       31, 2009
                                                  -----------  -----------
                                                  (Unaudited)
                                                   (thousands of dollars,
                                                      except per share
                  ASSETS                                  amounts)
Current Assets:
   Cash and cash equivalents                      $ 1,124,069  $   943,440
   Restricted cash                                     28,835       24,093
   Accounts and notes receivable, principally
    customer, net                                     114,453      152,569
   Inventory                                          293,066      331,584
   Derivative assets                                  201,626      132,062
   Margin deposits                                    166,364      198,582
   Prepayments and other current assets                90,914       86,844
   Current assets of discontinued operations
    ($40,530 and $55,855 of margin deposits)           88,748      108,476
                                                  -----------  -----------
      Total current assets                          2,108,075    1,977,650
                                                  -----------  -----------
Property, plant and equipment, gross                5,924,765    6,330,879
Accumulated depreciation                           (1,611,547)  (1,728,566)
                                                  -----------  -----------
Property, Plant and Equipment, net                  4,313,218    4,602,313
                                                  -----------  -----------

Other Assets:
   Other intangibles, net                             300,390      305,913
   Derivative assets                                   91,656       53,138
   Prepaid lease                                      282,700      277,370
   Other ($29,212 and $33,793 accounted for at
    fair value)                                       190,673      239,078
   Long-term assets of discontinued operations          5,224        5,232
                                                  -----------  -----------
      Total other assets                              870,643      880,731
                                                  -----------  -----------
      Total Assets                                $ 7,291,936  $ 7,460,694
                                                  ===========  ===========


            LIABILITIES AND EQUITY

Current Liabilities:
   Current portion of long-term debt and
    short-term borrowings                         $   401,090  $   404,505
   Accounts payable, principally trade                118,251      142,787
   Derivative liabilities                             132,441      151,461
   Margin deposits                                     67,590        2,860
   Other                                              253,673      169,898
   Current liabilities of discontinued operations
    ($13,309 and $11,000 of margin deposits)           62,494       58,452
                                                  -----------  -----------
      Total current liabilities                     1,035,539      929,963

Other Liabilities:
   Derivative liabilities                              56,229       61,436
   Other                                              259,931      260,547
   Long-term liabilities of discontinued
    operations                                         13,556       13,700
                                                  -----------  -----------
      Total other liabilities                         329,716      335,683

Long-term Debt                                      1,949,744    1,949,771
Commitments and Contingencies
Temporary Equity Stock-based Compensation               5,132        6,890
Stockholders' Equity:
   Preferred stock; par value $0.001 per share
    (125,000,000 shares authorized; none
     outstanding)                                           -            -
   Common stock; par value $0.001 per share
    (2,000,000,000 shares authorized;
     353,413,315 and 352,785,985 issued)                  114          114
   Additional paid-in capital                       6,264,565    6,259,248
   Accumulated deficit                             (2,249,342)  (1,972,389)
   Accumulated other comprehensive loss               (43,532)     (48,586)
                                                  -----------  -----------
      Total stockholders' equity                    3,971,805    4,238,387
                                                  -----------  -----------
      Total Liabilities and Equity                $ 7,291,936  $ 7,460,694
                                                  ===========  ===========


             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009







                    RRI Energy, Inc. and Subsidiaries
                  Consolidated Statements of Cash Flows
                                (Unaudited)


                                              Three Months Ended March 31,
                                              ----------------------------
                                                  2010           2009
                                              -------------  -------------
                                                 (thousands of dollars)
Cash Flows from Operating Activities:
Net loss                                      $    (276,706) $    (151,413)
Loss from discontinued operations                       515         45,632
                                              -------------  -------------
  Loss from continuing operations                  (276,191)      (105,781)

Adjustments to Reconcile Net Loss to Net Cash
 Provided by Operating Activities:
   Depreciation and amortization                     62,320         67,858
   Deferred income taxes                             62,134        (33,771)
   Net changes in energy derivatives               (125,805)        43,743
   Gains on sales of assets and emission and
    exchange allowances, net                           (417)       (18,930)
   Western states litigation and similar
    settlements                                      17,000              -
   Long-lived assets impairments                    247,715              -
   Other, net                                        (1,850)         4,800
   Changes in other assets and liabilities:
   Accounts and notes receivable, net                37,219         86,831
   Inventory                                         38,518         21,219
   Margin deposits, net                              96,948        105,783
   Net derivative assets and liabilities                875        (10,298)
   Accounts payable                                 (22,217)         2,287
   Other current assets                                (536)        (5,102)
   Other assets                                      (8,486)        (4,221)
   Taxes payable/receivable                           1,190         (2,689)
   Other current liabilities                         43,757         40,076
   Other liabilities                                  3,412          7,271
                                              -------------  -------------
     Net cash provided by continuing
      operations from operating activities          175,586        199,076
     Net cash provided by discontinued
      operations from operating activities           25,922        289,161
                                              -------------  -------------
     Net cash provided by operating
      activities                                    201,508        488,237
                                              -------------  -------------
Cash Flows from Investing Activities:
  Capital expenditures                              (17,997)       (55,472)
  Proceeds from sales of emission and
   exchange allowances                                    7         12,798
  Purchases of emission allowances                        -         (5,358)
  Restricted cash                                    (4,742)        (3,801)
  Other, net                                          1,400              -
                                              -------------  -------------
    Net cash used in continuing operations from
     investing activities                           (21,332)       (51,833)
    Net cash used in discontinued operations
     from investing activities                         (803)       (15,728)
                                              -------------  -------------
    Net cash used in investing activities           (22,135)       (67,561)
                                              -------------  -------------
Cash Flows from Financing Activities:
  Proceeds from issuances of stock                    1,881          2,163
                                              -------------  -------------
    Net cash provided by financing activities         1,881          2,163
                                              -------------  -------------
Net Change in Cash and Cash Equivalents,
 Total Operations                                   181,254        422,839
Less:  Net Change in Cash and Cash
 Equivalents, Discontinued Operations                   625         16,891
Cash and Cash Equivalents at Beginning of
 Period, Continuing Operations                      943,440      1,004,367
                                              -------------  -------------
Cash and Cash Equivalents at End of Period,
 Continuing Operations                        $   1,124,069  $   1,410,315
                                              =============  =============



                        Free Cash Flow Reconciliation
                                  (Unaudited)

                                              Three Months Ended March 31,
                                              ----------------------------
                                                  2010           2009
                                              -------------  -------------
                                                 (millions of dollars)

Operating cash flow from continuing
 operations                                   $         176  $         199
Change in margin deposits, net                          (97)          (106)
                                              -------------  -------------
  Adjusted cash flow provided by continuing
   operations                                            79             93
                                              -------------  -------------
Capital expenditures                                    (18)           (55)
Proceeds from sales of emission and exchange
 allowances                                               -             12
Purchases of emission allowances                          -             (5)
                                              -------------  -------------
  Free cash flow provided by continuing
   operations                                 $          61  $          45
                                              =============  =============

             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009





                    RRI Energy, Inc. and Subsidiaries
              Power Generation Operational and Financial Data
                                (Unaudited)


                                        Three Months Ended March 31,
                                      --------------------------------
                                        2010          2009     Change
                                      --------      --------  --------
                                                (in millions)
East Coal
Open energy gross margin (1)          $     88      $     92  $     (4)
Other margin (2)                            49            34        15
                                      --------      --------  --------
 Open gross margin (3) (4)            $    137      $    126  $     11
                                      ========      ========  ========

East Gas
Open energy gross margin (1)          $      -      $      1  $     (1)
Other margin (2)                            49            38        11
                                      --------      --------  --------
 Open gross margin (3) (4)            $     49      $     39  $     10
                                      ========      ========  ========


West
Open energy gross margin (1)          $      -      $      1  $     (1)
Other margin (2)                            12            11         1
                                      --------      --------  --------
 Open gross margin (3) (4)            $     12      $     12  $      -
                                      ========      ========  ========


Other
Open energy gross margin (1)          $      -      $      -  $      -
Other margin (2)                             6            13        (7)
                                      --------      --------  --------
 Open gross margin (3) (4)            $      6      $     13  $     (7)
                                      ========      ========  ========


Total
Open energy gross margin (1)          $     88      $     94  $     (6)
Other margin (2)                           116            96        20
                                      --------      --------  --------
 Open gross margin (4)                $    204      $    190  $     14
                                      ========      ========  ========
   Total margin capture factor (5)        82.4%         85.2%     -2.8%



                                        Three Months Ended March 31,
                                      --------------------------------
                                        2010          2009     Change
                                      --------      --------  --------

Generation (GWh) (6):
East Coal                              5,373.3       5,085.8     287.5
East Gas                                  92.6         156.4     (63.8)
West                                      21.2         128.2    (107.0)
Other                                        -             -         -
                                      --------      --------  --------
 Total                                 5,487.1       5,370.4     116.7
                                      ========      ========  ========

Open Energy Unit Margin ($/MWh) (7):
East Coal                             $  16.38      $  18.09  $  (1.71)
East Gas                                    NM  (8)     6.39        NM  (8)
West                                         -          7.80     (7.80)
Other                                        -             -         -
                                      --------      --------  --------
 Weighted average total               $  16.04      $  17.50  $  (1.46)
                                      ========      ========  ========


(1)  Open energy gross margin is calculated using the day-ahead and
     real-time market power sales prices received by the plants less
     market-based delivered fuel costs.
(2)  Other margin represents power purchase agreements, capacity payments,
     ancillary services revenues and selective commercial strategies
     relating to optimizing our assets.
(3)  Segment profitability measure.
(4)  This figure excludes the effects of hedges and other items and
     unrealized gains/losses on energy derivatives.
(5)  Total margin capture factor (TMCF) is calculated by dividing open
     gross margin generated by the plants by the total open gross margin
     available, assuming 100% availability.
(6)  Excludes generation related to power purchase agreements.
(7)  Represents open energy gross margin divided by generation.
(8)  NM is not meaningful.


             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009





                    RRI Energy, Inc. and Subsidiaries
                     Total Controllable Costs Metrics
                                (Unaudited)


              Efficiency Measures - Total Controllable Costs


                                                      Three Months Ended
                                                          March 31,
                                                    ----------------------
                                                       2010        2009
                                                    ----------  ----------
                                                     (in millions, except
                                                      per MWh and per MW
                                                            data)

Operation and maintenance, excluding severance (1)  $      160  $      156
REMA lease expense                                         (15)        (15)
General and administrative, excluding severance (1)         21          29
Maintenance capital expenditures                             6          19
                                                    ----------  ----------
 Total Controllable Costs                           $      172  $      189
                                                    ==========  ==========
 TWh generation                                            5.5         5.4

 Total Controllable Costs/MWh                       $       31  $       35

 MW capacity (2)                                        14,581      14,580

 Total Controllable Costs ($ thousands)/MW capacity $     11.8  $     13.0




                              Reconciliation

                                                      Three Months Ended
                                                          March 31,
                                                    ----------------------
                                                       2010        2009
                                                    ----------  ----------
                                                     (in millions, except
                                                      per MWh and per MW
                                                            data)

Operation and maintenance (O&M)                     $      160  $      157
General and administrative (G&A)                            21          29
Capital expenditures                                        18          55
                                                    ----------  ----------
 Total operation and maintenance, general and
  administrative and capital expenditures           $      199  $      241
                                                    ==========  ==========

Total Controllable Costs                            $      172  $      189
REMA lease expense in operation and maintenance             15          15
Severance included in operation and maintenance              -           1
Environmental capital expenditures                          10          29
Capitalized interest                                         2           7
                                                    ----------  ----------
 Total operation and maintenance, general and
  administrative and capital expenditures           $      199  $      241
                                                    ==========  ==========

TWh generation                                             5.5         5.4

Total O&M, G&A and capital expenditures/MWh         $       36  $       45

MW capacity (2)                                         14,581      14,580
Total O&M, G&A and capital expenditures
 ($ thousands)/MW capacity                          $     13.6  $     16.5




(1) Excludes severance charges incurred in connection with (a)
    repositioning the company in connection with the sale of
    our retail business and (b) implementing our plant-specific operating
    model.  During the three months ended March 31, 2010 and 2009, there
    were no severance charges included in general and administrative.

(2) MW capacity changed from March 31, 2009 to March 31, 2010 due to MW
    re-ratings that occurred during the second and fourth quarters of 2009.



             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009





                    RRI Energy, Inc. and Subsidiaries
                                East Coal
                               (Unaudited)



                                               Q1 Total
                        Net                 Margin Capture  Q1 Generation
                     Generating                 Factor          (GWh)
                     Capacity   Heat Rate   --------------  ---------------
Unit Name              (MW)     (MMBtu/MWh)  2010    2009    2010    2009
                     ---------- ----------- ------  ------  ------- -------

Cheswick                    560        10.0   75.5%   91.2%   758.0   761.6
Conemaugh (1)               281         9.4   94.8%   97.8%   531.7   548.4
Elrama                      460        11.3   78.0%   77.8%   141.1    77.9
Keystone (1)                284         9.5   93.2%   90.0%   514.1   499.2
Portland                    401         9.8   75.5%   81.7%   433.3   594.0
Seward                      525         9.6   60.9%   56.6%   654.9   581.1
Shawville (1)               597        10.3   80.2%   94.1%   751.7   729.2
Titus                       243        10.8   86.0%   96.3%   229.4   331.7
Avon Lake                   763         9.3   83.3%   79.5%   908.3   742.1
New Castle                  333        10.6   94.4%   84.0%   264.0   127.9
Niles                       244        10.5   77.9%   65.3%   186.8    92.7
                     ----------             ------  ------  ------- -------
East Coal Total           4,691               79.1%   82.5% 5,373.3 5,085.8
                     ==========             ======  ======  ======= =======


(1) The Company leases a 100% interest in the Shawville plant, a 16.67%
    interest in the Keystone plant and a 16.45% interest in the Conemaugh
    plant under facility lease agreements, which expire in 2026, 2034 and
    2034, respectively.  The table includes our net share of capacity of
    these plants.


             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009





                    RRI Energy, Inc. and Subsidiaries
                                 East Gas
                                (Unaudited)



                                               Q1 Total             Q1
                        Net                 Margin Capture      Generation
                     Generating                  Factor            (GWh)
                     Capacity    Heat Rate  --------------      -----------
Unit Name              (MW)     (MMBtu/MWh) 2010      2009      2010  2009
                     ---------- ----------- ----      ----      ----- -----

Aurora                      878        10.5   NM  (1)   NM  (1)   0.3   1.4
Blossburg                    19        14.6   NM  (1)   NM  (1)   0.3   0.1
Brunot Island               289        10.4   NM  (1)   NM  (1)   2.0     -
Gilbert                     536        11.0   NM  (1)   NM  (1)   0.7   7.9
Glen Gardner                160        14.6   NM  (1)   NM  (1)   0.1     -
Hamilton                     20        14.8   NM  (1)   NM  (1)     -   0.1
Hunterstown                  60        14.8   NM  (1)   NM  (1)     -   0.3
Hunterstown CCGT            810         7.0 97.0%     93.8%      88.7 141.4
Mountain                     40        14.3   NM  (1)   NM  (1)     -   1.5
Orrtanna                     20        14.4   NM  (1)   NM  (1)     -     -
Portland                    169        11.2   NM  (1)   NM  (1)     -   1.9
Sayreville                  224        13.8   NM  (1)   NM  (1)   0.5   1.2
Shawnee                      20        14.0   NM  (1)   NM  (1)     -     -
Shawville (2)                 6        10.2   NM  (1)   NM  (1)     -     -
Titus                        31        17.4   NM  (1)   NM  (1)     -     -
Tolna                        39        14.2   NM  (1)   NM  (1)     -   0.2
Warren                       68        12.8   NM  (1)   NM  (1)     -     -
Werner                      212        13.8   NM  (1)   NM  (1)     -   0.4
Shelby                      356         9.8   NM  (1)   NM  (1)     -     -
                     ----------             ----      ----      ----- -----
East Gas Total            3,957             91.7%     92.1%      92.6 156.4
                     ==========             ====      ====      ===== =====


(1)  NM is not meaningful.
(2)  The Company leases a 100% interest in the Shawville plant under a
     facility lease agreement, which expires in 2026.  The table includes
     our net share of capacity of this plant.



             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009





                    RRI Energy, Inc. and Subsidiaries
                              West and Other
                                (Unaudited)


West

                                               Q1 Total             Q1
                        Net                 Margin Capture      Generation
                     Generating                 Factor            (GWh)
                     Capacity   Heat Rate   --------------      -----------
Unit Name              (MW)     (MMBtu/MWh) 2010      2009      2010  2009
                     ---------- ----------- ----      ----      ----- -----

Coolwater                   622        10.1   NM  (1)   NM  (1)   0.8   0.7
Ellwood (2)                  54        13.3   NM  (1)   NM  (1)     -     -
Etiwanda (2)                640        10.0   NM  (1)   NM  (1)     -     -
Mandalay (2)                560        10.9   NM  (1)   NM  (1)  10.6  67.2
Ormond Beach              1,516         9.6   NM  (1)   NM  (1)   9.8  60.3
                     ----------             ----      ----      ----- -----
West Total                3,392             79.1%     81.5%      21.2 128.2
                     ==========             ====      ====      ===== =====


Other

                                               Q1 Total             Q1
                        Net                 Margin Capture      Generation
                     Generating                 Factor            (GWh)
                     Capacity   Heat Rate   --------------      -----------
Unit Name              (MW)     (MMBtu/MWh) 2010      2009      2010  2009
                     ---------- ----------- ----      ----      ----- -----

Choctaw                     800         7.0   NM  (1)   NM  (1)     -     -
Indian River (2)(3)         587        10.5   NM  (1)   NM  (1)     -     -
Osceola (2)                 470        11.0   NM  (1)   NM  (1)     -     -
Sabine (4)                   54         N/A  N/A       N/A        N/A   N/A
Vandolah (5)                630         N/A  N/A       N/A        N/A   N/A
                     ----------             ----      ----      ----- -----
Other Total               2,541               NM  (1)   NM  (1)     -     -
                     ==========             ====      ====      ===== =====


(1)  NM is not meaningful.
(2)  Excludes generation during periods the unit operated under power
     purchase agreements.
(3)  This plant was mothballed in January 2010.
(4)  We own 50% interest in this plant located in Texas (non-ERCOT) having
     a net generating capacity of 108 MW.  An unaffiliated party owns the
     other 50%.  The table includes our net share of the capacity of this
     plant.
(5)  We are party to a tolling agreement entitling us to 100% of the
     capacity of this Florida plant having 630 MW of net generating
     capacity. This tolling agreement expires in 2012 and is treated as an
     operating lease for accounting purposes.

             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009





                    RRI Energy, Inc. and Subsidiaries
                           Capital Expenditures
                                (Unaudited)



                                                    Three Months Ended
                                                        March 31,
                                                     2010        2009
                                                    -------     -------
                                                      (in millions)

Maintenance capital expenditures                    $     6     $    19
                                                    -------     -------
Environmental                                            10          29
Capitalized interest                                      2 (1)       7 (2)
                                                    -------     -------
    Total environmental and capitalized interest         12          36
                                                    -------     -------
        Total capital expenditures                  $    18     $    55
                                                    =======     =======


(1) Relates primarily to environmental capital expenditures for SO2
    emission reductions at our Cheswick plant, which is included in our
    East Coal segment.
(2) Relates primarily to environmental capital expenditures for SO2
    emission reductions at our Cheswick and Keystone plants,
    which are included in our East Coal segment.



             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009






                    RRI Energy, Inc. and Subsidiaries
                    GAAP Debt, Gross Debt and Net Debt
                                (Unaudited)


                                      March 31,      December
                                        2010         31, 2009       Change
                                      ---------      ---------      ------
                                                  (in millions)

 Senior secured revolver              $       -      $       -      $    -
 Senior secured notes                       279            279           -
 Senior unsecured notes                   1,300          1,300           -
 Orion Power 12% notes (1)                  401            405          (4)
 PEDFA fixed-rate bonds for Seward
  plant                                     371            371           -
                                      ---------      ---------      ------
   GAAP Debt                          $   2,351      $   2,355      $   (4)

 Orion Power 12% notes purchase
  accounting adjustment                      (1)            (5)          4
 REMA operating leases (off-balance
  sheet)                                    423            423           -
                                      ---------      ---------      ------
   Gross Debt                         $   2,773      $   2,773      $    -

 Cash and cash equivalents               (1,124)          (943)       (181)
 Restricted cash                            (29)           (24)         (5)
 Net margin deposits and cash
  collateral                               (154) (2)      (260) (3)    106
                                      ---------      ---------      ------
   Net Debt                           $   1,466      $   1,546      $  (80)
                                      =========      =========      ======


(1) Orion Power 12% notes include purchase accounting adjustment of $1
    million and $5 million as of March 31, 2010 and December 31, 2009,
    respectively. This debt was paid off in May 2010.
(2) Includes $27 million related to discontinued operations and $28 million
    related to cash collateral.
(3) Includes $45 million related to discontinued operations and $20 million
    related to cash collateral.



             Reference is made to RRI Energy, Inc.'s Annual Report
               on Form 10-K for the year ended December 31, 2009