SOURCE: RRI Energy

RRI Energy

February 25, 2010 07:00 ET

RRI Energy Reports Fourth Quarter and 2009 Results

HOUSTON, TX--(Marketwire - February 25, 2010) - RRI Energy, Inc. (NYSE: RRI)

--  Implemented actions to mitigate near-term risk from current market
    environment
    --  Sold retail business eliminating nearly $3 billion of collateral
        obligations and contingent capital
    --  Implemented modest hedging for 2010 and 2011 for free cash flow
        break-even or better if market conditions worsen
    --  Reduced gross debt by $540 million and maintained $1.6 billion of
        liquidity
--  Improved the current performance and value of the business and
    positioned for longer-term market recovery
    --  Captured over $415 million in future forward capacity and PPA
        revenue
    --  Realigned corporate support costs saving $40 million
    --  Implemented revised plans for profitability at marginal power
        plants
    --  Completed Keystone scrubber, which significantly reduces SO2
        emissions
--  Fourth quarter and 2009 financial results reflect depressed commodity
    prices and weak economic conditions
--  Indian River and New Castle power plant non-cash impairments totaling
    $211 million charged in fourth quarter
--  2010 and 2011 outlooks reflect challenging market conditions

RRI Energy, Inc. (NYSE: RRI) today is reporting open EBITDA of $185 million for 2009, compared to $545 million for 2008. The decline was primarily due to lower energy unit margins resulting from lower commodity prices and lower power demand. Adjusted EBITDA was $55 million in 2009, compared to $871 million in 2008. Out-of-the-money coal hedges in 2009 compared to in-the-money coal hedges in 2008 form the primary difference between open and adjusted EBITDA. Free cash flow used in continuing operations during 2009 was $327 million, compared to free cash flow provided by continuing operations of $241 million for 2008. These results exclude the performance of the Texas retail business, which was sold on May 1, 2009 and is included in discontinued operations.

"We are managing the challenges of the difficult economic environment and are well positioned to deliver long-term shareholder value," said Mark Jacobs, president and chief executive officer of RRI Energy. "We are squarely focused on what we can control. In terms of managing risk, we continue to maintain strong liquidity levels which totaled $1.6 billion at year end with approximately $1 billion of cash and implemented a modest hedging program to provide a high probability of achieving free cash flow break-even or better in 2010 and 2011, even if market conditions deteriorate. In addition, we are taking actions to improve the performance and value of the business in the current environment and position it for longer-term market recovery."

Open EBITDA was $56 million for the fourth quarter of 2009, compared to $40 million for the same period of 2008. Adjusted EBITDA was $13 million for the fourth quarter of 2009, compared to $162 million for the fourth quarter of 2008. The declines were due to the same factors described above.

The loss from continuing operations before income taxes for 2009 was $604 million, compared to income of $26 million for 2008. The 2009 reported results include impairments of long-lived assets totaling $211 million, net unrealized gains from energy derivatives of $22 million, $9 million in severance costs and charges for debt extinguishments totaling $8 million. The reported numbers for 2008 include a goodwill impairment totaling $305 million, a $37 million charge for western states litigation and similar settlements, net unrealized losses from energy derivatives of $9 million and charges for debt extinguishments totaling $2 million. Operating cash flow from continuing operations was ($392) million for 2009, compared to $704 million for 2008. The $540 million reduction in gross debt consists primarily of $268 million of GAAP debt and $261 million from debt recorded in discontinued operations.

The loss from continuing operations before income taxes for the fourth quarter of 2009 was $270 million, compared to a loss of $325 million for the fourth quarter of 2008. The reported results include impairments of long-lived assets totaling $211 million and net unrealized gains from energy derivatives of $52 million in 2009. The reported results for 2008 include a goodwill impairment totaling $305 million and net unrealized losses from energy derivatives of $67 million.

Outlook

RRI Energy's outlook is based on forward commodity prices as of February 5, 2010. The outlook for open EBITDA is $367 million and $366 million for the years ending December 31, 2010 and 2011, respectively. The outlook for adjusted EBITDA, which includes the impact of hedges and other items, is $360 million and $309 million for the same periods. The outlook for free cash flow provided by continuing operations is $92 million and $110 million for the years ending December 31, 2010 and 2011, respectively.


                          Open EBITDA Reconciliation

($ millions)                          2008A     2009A     2010E     2011E
                                    --------  --------  --------  --------
Income (loss) from continuing
 operations before income taxes     $     26  $   (604) $   (104) $   (125)
Unrealized (gains) losses on energy
 derivatives                               9       (22)        4         7
Severance                                 --         9         4        --
Western states litigation and
 similar settlements                      37        --        --        --
Goodwill and long-lived assets
 impairments                             305       211        --        --
Debt extinguishments losses                2         8        --        --
Depreciation and amortization            313       269       295       277
Interest expense, net                    179       184       161       150
                                    --------  --------  --------  --------
Adjusted EBITDA                     $    871  $     55  $    360  $    309
Hedges and other items                  (233)      152         7        57
Gains on sales of assets and
 emission and exchange
 allowances, net                         (93)      (22)       --        --
                                    --------  --------  --------  --------
Open EBITDA                         $    545  $    185  $    367  $    366




           Free Cash Flow from Continuing Operations Reconciliation

($ millions)                          2008A     2009A     2010E     2011E
                                    --------  --------  --------  --------
Operating cash flow from continuing
 operations                         $    704  $   (392) $    330  $    210
Western states litigation and
 similar settlements payments             34         3        68        --
Change in margin deposits, net          (199)      256      (192)      (14)
                                    --------  --------  --------  --------
Adjusted cash flow provided by
 (used in) continuing operations    $    539  $   (133) $    206  $    196
Maintenance capital expenditures         (56)      (56)      (48)      (42)
Environmental capital expenditures
 and capitalized interest               (223)     (134)      (40)      (20)
Emission and exchange allowances
 activity, net                           (19)       (4)      (26)      (24)
                                    --------  --------  --------  --------
Free cash flow provided by
 (used in) continuing operations    $    241  $   (327) $     92  $    110



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 (used in) continuing operations
--  Free cash flow provided by (used in) continuing operations
--  Open energy gross margin
--  Other margin
--  Open gross margin
--  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 fourth quarter 2009 earnings conference call beginning at 11:00 a.m. Eastern Time on Thursday, February 25, 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.

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, 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" section of our most recent Annual Report on Form 10-K 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.



                    RRI Energy, Inc. and Subsidiaries
                  Consolidated Statements of Operations


                           Three Months Ended       Twelve Months Ended
                              December 31,              December 31,
                        ------------------------  ------------------------
                           2009         2008         2009         2008
                        -----------  -----------  -----------  -----------
                               (Unaudited)
                         (thousands of dollars, except per share amounts)
Revenues:
  Revenues (including
   $7,055, $11,755,
   $(44,170) and
   $(1,151) unrealized
   gains (losses))
   (including $0, $0,
   $0 and $253,001
   from affiliates)     $   461,699  $   540,673  $ 1,824,839  $ 3,393,900
                        -----------  -----------  -----------  -----------
Expenses:
  Cost of sales
   (including $45,104,
   $(78,211), $65,961
   and $(7,405)
   unrealized gains
   (losses)) (including
   $0, $28, $0 and
   $71,568 from
   affiliates)              256,876      322,173    1,129,249    1,913,689
  Operation and
   maintenance              121,686      139,498      550,253      595,262
  General and
   administrative            20,400       36,262      100,745      121,173
  Western states
   litigation and
   similar settlements            -            -            -       37,467
  Gains on sales of
   assets and emission
   and exchange
   allowances, net             (729)     (52,718)     (21,913)     (92,202)
  Goodwill and
   long-lived assets
   impairments              210,771      304,859      210,771      304,859
  Depreciation and
   amortization              65,963       68,583      269,191      312,642
                        -----------  -----------  -----------  -----------
    Total operating
     expense                674,967      818,657    2,238,296    3,192,890
                        -----------  -----------  -----------  -----------
Operating Income (Loss)    (213,268)    (277,984)    (413,457)     201,010
                        -----------  -----------  -----------  -----------
Other Income (Expense):
  Income (loss) of
   equity investment, net      (543)      (1,402)         605        1,198
  Debt extinguishments
   losses                    (8,242)           -       (7,501)      (2,257)
  Other, net                    (42)         108         (248)       4,727
  Interest expense          (49,696)     (47,787)    (186,296)    (199,590)
  Interest income             1,140        2,032        2,516       21,178
                        -----------  -----------  -----------  -----------
    Total other expense     (57,383)     (47,049)    (190,924)    (174,744)
                        -----------  -----------  -----------  -----------

Income (Loss) from
 Continuing Operations
 Before Income Taxes       (270,651)    (325,033)    (604,381)      26,266
  Income tax expense
   (benefit)                (19,361)     (26,276)    (125,349)     136,532
                        -----------  -----------  -----------  -----------

Loss from Continuing
 Operations                (251,290)    (298,757)    (479,032)    (110,266)
  Income (loss) from
   discontinued
   operations                17,377     (138,898)     881,844     (629,409)
                        -----------  -----------  -----------  -----------
Net Income (Loss)       $  (233,913) $  (437,655) $   402,812  $  (739,675)
                        ===========  ===========  ===========  ===========

Basic Earnings (Loss)
 Per Share:
  Loss from continuing
   operations           $     (0.71) $     (0.85) $     (1.36) $     (0.32)
  Income (loss) from
   discontinued
   operations                  0.05        (0.40)        2.51        (1.81)
                        -----------  -----------  -----------  -----------
  Net income (loss)     $     (0.66) $     (1.25) $      1.15  $     (2.13)
                        ===========  ===========  ===========  ===========

Diluted Earnings (Loss)
 Per Share:
  Loss from continuing
   operations           $     (0.71) $     (0.85) $     (1.36) $     (0.32)
  Income (loss) from
   discontinued
   operations                  0.05        (0.40)        2.51        (1.81)
                        -----------  -----------  -----------  -----------
  Net income (loss)     $     (0.66) $     (1.25) $      1.15  $     (2.13)
                        ===========  ===========  ===========  ===========

Weighted Average Common
 Shares Outstanding (in
 thousands):
  Basic                     352,842      350,020      351,396      347,823
  Diluted                   352,842      350,020      351,396      347,823


    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 - Adjusted and Open
                              (Unaudited)


                               Three Months Ended      Twelve Months Ended
                                  December 31,            December 31,
                            ----------------------  ----------------------
                             2009    2008   Change   2009    2008   Change
                            ------  ------  ------  ------  ------  ------
                                        (millions of dollars)

East coal open gross
 margin (1)                 $  113  $  144  $  (31) $  425  $  858  $ (433)
East gas open gross
 margin (1)                     53      41      12     208     187      21
West open gross margin (1)      19      28      (9)    133     166     (33)
Other open gross margin (1)     12       3       9      60      45      15
                            ------  ------  ------  ------  ------  ------
    Total                      197     216     (19)    826   1,256    (430)

Operation and maintenance,
 excluding severance          (120)   (139)     19    (544)   (595)     51
General and administrative,
 excluding severance           (21)    (36)     15     (98)   (122)     24
Other income (expense), net      -      (1)      1       1       6      (5)
                            ------  ------  ------  ------  ------  ------
    Open EBITDA                 56      40      16     185     545    (360)
                            ------  ------  ------  ------  ------  ------

Power                          (10)    (17)      7     (40)    (70)     30
Fuel                           (43)     80    (123)   (228)    272    (500)
Tolling / Other                  9       6       3     116      31      85
                            ------  ------  ------  ------  ------  ------
    Hedges and other items     (44)     69    (113)   (152)    233    (385)
Gains on sales of assets
 and emission and exchange
 allowances, net                 1      53     (52)     22      93     (71)
                            ------  ------  ------  ------  ------  ------
    Adjusted EBITDA             13     162    (149)     55     871    (816)
                            ------  ------  ------  ------  ------  ------

Unrealized gains (losses)
 on energy derivatives          52     (67)    119      22      (9)     31
Western states litigation
 and similar settlements         -       -       -       -     (37)     37
Severance (2)                   (1)      -      (1)     (9)      -      (9)
Goodwill and long-lived
 assets impairments           (211)   (305)     94    (211)   (305)     94
Debt extinguishments losses     (9)      -      (9)     (8)     (2)     (6)
                            ------  ------  ------  ------  ------  ------
    EBITDA                    (156)   (210)     54    (151)    518    (669)
                            ------  ------  ------  ------  ------  ------

Depreciation and
 amortization                  (66)    (69)      3    (269)   (313)     44
Interest expense, net          (48)    (46)     (2)   (184)   (179)     (5)
                            ------  ------  ------  ------  ------  ------
Income (loss) from
 continuing operations
 before income taxes        $ (270) $ (325) $   55  $ (604) $   26  $ (630)
                            ======  ======  ======  ======  ======  ======


(1)  Segment profitability measure consists of open energy gross margin and
     other margin.
(2)  Includes severance from operation and maintenance and general and
     administrative expenses.


    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


                                             December 31,    December 31,
                                                 2009            2008
                                            --------------  --------------
                   ASSETS                       (thousands of dollars)
Current Assets:
  Cash and cash equivalents                 $      943,440  $    1,004,367
  Restricted cash                                   24,093           2,721
  Accounts and notes receivable,
   principally customer                            152,569         249,871
  Inventory                                        331,584         314,999
  Derivative assets                                132,062         161,340
  Margin deposits                                  198,582          32,676
  Investment in and receivables from
   Channelview, net                                      -          58,703
  Prepayments and other current assets              86,844         124,449
  Current assets of discontinued
   operations ($55,855 and $295,477 of
   margin deposits)                                108,476       2,506,340
                                            --------------  --------------
     Total current assets                        1,977,650       4,455,466
                                            --------------  --------------
Property, plant and equipment, gross             6,330,879       6,417,268
Accumulated depreciation                        (1,728,566)     (1,597,479)
                                            --------------  --------------
Property, Plant and Equipment, net               4,602,313       4,819,789
                                            --------------  --------------

Other Assets:
  Other intangibles, net                           305,913         380,554
  Derivative assets                                 53,138          78,879
  Prepaid lease                                    277,370         273,374
  Other ($33,793 and $29,012 accounted for
   at fair value)                                  239,078         219,552
  Long-term assets of discontinued
   operations                                        5,232         494,781
                                            --------------  --------------
     Total other assets                            880,731       1,447,140
                                            --------------  --------------
     Total Assets                           $    7,460,694  $   10,722,395
                                            ==============  ==============

          LIABILITIES AND EQUITY

Current Liabilities:
  Current portion of long-term debt and
   short-term borrowings                    $      404,505  $       12,517
  Accounts payable, principally trade              142,787         156,604
  Derivative liabilities                           151,461         202,206
  Margin deposits                                    2,860          93,000
  Other                                            169,898         199,026
  Current liabilities of discontinued
   operations ($11,000 and $0 of margin
   deposits)                                        58,452       2,375,895
                                            --------------  --------------
     Total current liabilities                     929,963       3,039,248

Other Liabilities:
  Derivative liabilities                            61,436         140,493
  Other                                            260,547         272,079
  Long-term liabilities of discontinued
   operations                                       13,700         873,190
                                            --------------  --------------
     Total other liabilities                       335,683       1,285,762

Long-term Debt                                   1,949,771       2,610,737
Commitments and Contingencies
Temporary Equity Stock-based Compensation            6,890           9,004
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;
   352,785,985 and 349,812,537 issued)                 114             111
  Additional paid-in capital                     6,259,248       6,238,639
  Accumulated deficit                           (1,972,389)     (2,375,201)
  Accumulated other comprehensive loss             (48,586)        (85,905)
                                            --------------  --------------
     Total stockholders' equity                  4,238,387       3,777,644
                                            --------------  --------------
     Total Liabilities and Equity           $    7,460,694  $   10,722,395
                                            ==============  ==============


    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


                                           Twelve Months Ended December 31,
                                            ------------------------------
                                                 2009            2008
                                            --------------  --------------
                                               (thousands of dollars)
Cash Flows from Operating Activities:
Net income (loss)                           $      402,812  $     (739,675)
(Income) loss from discontinued operations        (881,844)        629,409
                                            --------------  --------------
    Net loss from continuing operations           (479,032)       (110,266)
Adjustments to Reconcile Net Income (Loss)
 to Net Cash Provided by Operating Activities:
  Depreciation and amortization                    269,191         312,642
  Deferred income taxes                           (120,646)         99,930
  Net changes in energy derivatives                (21,285)          8,556
  Amortization of deferred financing costs           7,086           6,653
  Gains on sales of assets and emission
   and exchange allowances, net                    (21,913)        (92,202)
  Western states litigation and similar
   settlements                                           -           3,467
  Goodwill and long-lived assets
   impairments                                     210,771         304,859
  Debt extinguishments losses                        7,501           2,257
  Other, net                                       (13,121)        (10,486)
  Changes in other assets and liabilities:
    Accounts and notes receivable, net             108,985           9,978
    Change in notes, receivables and payables
     with affiliates, net                               43           3,687
    Inventory                                      (14,711)        (31,862)
    Margin deposits, net                          (256,046)        199,370
    Net derivative assets and liabilities          (32,460)          3,049
    Western states litigation and similar
     settlement payments                            (3,449)              -
    Accounts payable                               (12,776)        (48,470)
    Other current assets                            12,269           1,969
    Other assets                                    (6,466)         10,207
    Taxes payable/receivable                        (6,883)         24,325
    Other current liabilities                      (11,157)         10,091
    Other liabilities                               (7,417)         (4,327)
                                            --------------  --------------
       Net cash provided by (used in)
        continuing operations from
        operating activities                      (391,516)        703,427
       Net cash provided by (used in)
        discontinued operations from
        operating activities                       585,045        (520,732)
                                            --------------  --------------
       Net cash provided by operating
        Activities                                 193,529         182,695
                                            --------------  --------------
Cash Flows from Investing Activities:
  Capital expenditures                            (189,511)       (278,757)
  Proceeds from sales of assets, net                35,931         526,956
  Proceeds from sales of emission and
   exchange allowances                              19,180          42,458
  Purchases of emission allowances                 (22,711)        (60,986)
  Restricted cash                                   (4,620)            530
  Other, net                                         3,750           6,562
                                            --------------  --------------
       Net cash provided by (used in)
        continuing operations from
        investing activities                      (157,981)        236,763
       Net cash provided by (used in)
        discontinued operations from
        investing activities                       311,800         (20,128)
                                            --------------  --------------
       Net cash provided by investing
        activities                                 153,819         216,635
                                            --------------  --------------
Cash Flows from Financing Activities:
  Payments of long-term debt                      (254,980)        (57,704)
  Payments of debt extinguishments                  (4,778)         (1,017)
  Proceeds from issuances of stock                  11,245          13,570
                                            --------------  --------------
       Net cash used in continuing
        operations from financing
        activities                                (248,513)        (45,151)
       Net cash used in discontinued
        operations from financing
        activities                                (260,707)              -
                                            --------------  --------------
       Net cash used in financing
        activities                                (509,220)        (45,151)
                                            --------------  --------------
Net Change in Cash and Cash Equivalents,
 Total Operations                                 (161,872)        354,179
Less: Net Change in Cash and Cash
 Equivalents, Discontinued Operations             (100,945)       (126,118)
Cash and Cash Equivalents at Beginning of
 Period, Continuing Operations                   1,004,367         524,070
                                            --------------  --------------
Cash and Cash Equivalents at End of Period,
 Continuing Operations                      $      943,440  $    1,004,367
                                            ==============  ==============





                          Free Cash Flow Reconciliation
                                    (Unaudited)


                                           Twelve Months Ended December 31,
                                            ------------------------------
                                                 2009            2008
                                            --------------  --------------
                                                (millions of dollars)

Operating cash flow from continuing
 operations                                 $         (392) $          704
Western states litigation and similar
 settlements payments                                    3              34
Change in margin deposits, net                         256            (199)
                                            --------------  --------------
    Adjusted cash flow provided by (used in)
     continuing operations                            (133)            539
                                            --------------  --------------
Capital expenditures                                  (190)           (279)
Proceeds from sales of emission and
 exchange allowances                                    19              42
Purchases of emission allowances                       (23)            (61)
                                            --------------  --------------
    Free cash flow provided by (used in)
     continuing operations                  $         (327) $          241
                                            ==============  ==============


    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            Twelve Months Ended
                    December 31,                   December 31,
                 2009          2008           2009              2008
            -------------  ------------  --------------  ------------------
                   $ Eco-         $ Eco-         $ Eco-              $ Eco-
                    nomic          nomic          nomic               nomic
              GWh    (1)     GWh    (1)    GWh     (1)     GWh         (1)
            -------  ----  -------  ---  --------  ----  --------      ----
Economic
 Generation
 (2) (3):
East Coal   6,192.1    62% 6,688.1   66% 24,078.7    61% 27,136.7       67%
East Gas      355.0     4%   183.5    2%  2,054.7     6%  1,362.5        4%
West          116.8     2%   601.0   10%    693.4     3%  2,553.9       10%
Other           2.4     0%     4.1    0%     77.0     1%     74.5        1%
            -------  ----  -------  ---  --------  ----  --------      ---
   Total    6,666.3    26% 7,476.7   28% 26,903.8    26% 31,127.6       30%
            =======  ====  =======  ===  ========  ====  ========      ===

Commercial
 Capacity
 Factor (4):
East Coal      83.0%          88.2%          82.4%           86.3%
East Gas       88.1%          89.4%          95.0%           90.6%
West           97.0%          93.0%          88.1%           93.7%
Other         100.0%         100.0%          99.1%           82.7%
            -------        -------       --------        --------
   Total       83.5%          88.6%          83.6%           87.1%
            =======        =======       ========        ========

Generation
 (3):         GWh            GWh            GWh             GWh
            -------        -------       --------        --------
East Coal   5,139.2        5,896.9       19,850.5        23,425.9
East Gas      312.7          164.1        1,951.1         1,234.9
West          113.3          559.2          611.0         2,393.2
Other           2.4            4.1           76.3            61.6
            -------        -------       --------        --------
   Total    5,567.6        6,624.3       22,488.9        27,115.6
            =======        =======       ========        ========

Open Energy
 Unit Margin
 ($/MWh) (5):
East Coal   $ 11.87        $ 18.15       $  12.04        $  30.69
East Gas       6.40          12.19          10.25           34.01
West          17.65              -          22.91              NM (6)
Other             -              -              -           16.23
            -------        -------       --------        --------
   Weighted
    average
    total   $ 11.67        $ 16.45       $  12.14        $  28.07
            =======        =======       ========        ========




              Three Months Ended            Twelve Months Ended
                  December 31,                  December 31,
            ----------------------       -------------------------
              2009   2008  Change          2009    2008   Change
            -------  ----  -------       -------- ------  ---------
                 (in millions)                 (in millions)
East Coal
Open energy
 gross
 margin (7) $    61  $107  $   (46)      $    239 $  719  $   (480)
Other
 margin (8)      52    37       15            186    139        47
            -------  ----  -------       -------- ------  --------
  Open gross
   margin
   (9) (10) $   113  $144  $   (31)      $    425 $  858  $   (433)
            =======  ====  =======       ======== ======  ========

East Gas
Open energy
 gross
 margin (7) $     2  $  2  $     -       $     20 $   42  $    (22)
Other
 margin (8)      51    39       12            188    145        43
            -------  ----  -------       -------- ------  --------
  Open gross
   margin
   (9) (10) $    53  $ 41  $    12       $    208 $  187  $     21
            =======  ====  =======       ======== ======  ========

West
Open energy
 gross
 margin (7) $     2  $  -  $     2       $     14 $   (1) $     15
Other
 margin (8)      17    28      (11)           119    167       (48)
            -------  ----  -------       -------- ------  --------
  Open gross
   margin
   (9) (10) $    19  $ 28  $    (9)      $    133 $  166  $    (33)
            =======  ====  =======       ======== ======  ========

Other
Open energy
 gross
 margin (7) $     -  $  -  $     -       $      - $    1  $     (1)
Other
 margin (8)      12     3        9             60     44        16
            -------  ----  -------       -------- ------  --------
  Open gross
   margin
   (9) (10) $    12  $  3  $     9       $     60 $   45  $     15
            =======  ====  =======       ======== ======  ========

Total
Open energy
 gross
 margin (7) $    65  $109  $   (44)      $    273 $  761  $   (488)
Other
 margin (8)     132   107       25            553    495        58
            -------  ----  -------       --------  -----  --------
  Open gross
   margin
   (10)     $   197  $216  $   (19)      $    826 $1,256  $   (430)
            =======  ====  =======       ======== ======  ========


(1)  Generally represents economic generation (hours) divided by maximum
     generation hours (maximum plant capacity multiplied by 8,760 hours).
(2)  Estimated generation at 100% plant availability based on an hourly
     analysis of when it is economical to generate based on the price of
     power, fuel, emission allowances and variable operating costs.
(3)  Excludes generation related to power purchase agreements, including
     tolling agreements.
(4)  Generation divided by economic generation.
(5)  Represents open energy gross margin divided by generation.
(6)  NM is not meaningful.
(7)  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.
(8)  Other margin represents power purchase agreements, capacity payments,
     ancillary services revenues and selective commercial strategies
     relating to optimizing our assets.
(9)  Segment profitability measure.
(10) This figure excludes the effects of hedges and other items and
     unrealized gains/losses on energy derivatives.


    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)


                                                         Q4 economic
                                                       generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)    2009        2008
                            ----------- ----------- ----------- -----------

Cheswick                            560       10.0        931.4       673.1
Conemaugh (2)                       280        9.4        565.8       583.8
Elrama                              460       11.3         94.0       204.9
Keystone (2)                        282        9.5        594.6       597.5
Portland                            401        9.8        657.0       696.9
Seward                              525        9.6      1,110.2     1,116.0
Shawville (2)                       597       10.3        744.9       965.0
Titus                               243       10.8        211.6       348.4
Avon Lake                           734        9.3        937.5       864.2
New Castle                          328       10.6        192.9       331.3
Niles                               216       10.5        152.2       307.0
                            -----------             ----------- -----------
East Coal Total                   4,626                 6,192.1     6,688.1
                            ===========             =========== ===========


                                Q4 commercial
                               capacity factor        Q4 generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Cheswick                          76.6%       93.6%       713.8       630.2
Conemaugh (2)                     88.7%       60.4%       501.8       352.6
Elrama                            84.8%       67.4%        79.7       138.1
Keystone (2)                      54.8%       97.3%       325.9       581.5
Portland                          89.5%       88.9%       588.3       619.5
Seward                            92.3%       99.8%     1,024.9     1,113.6
Shawville (2)                     85.6%       86.9%       638.0       838.2
Titus                             89.1%       86.0%       188.6       299.7
Avon Lake                         87.3%       93.9%       818.4       811.1
New Castle                        88.0%       95.6%       169.8       316.7
Niles                             59.1%       63.7%        90.0       195.7
                            ----------  ----------  ----------- -----------
East Coal Total                   83.0%       88.2%     5,139.2     5,896.9
                            ==========  ==========  =========== ===========




                                                       Q4 YTD economic
                                                       generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)    2009        2008
                            ----------- ----------- ----------- -----------

Cheswick                            560       10.0      3,565.6     2,602.6
Conemaugh (2)                       280        9.4      2,144.8     2,311.6
Elrama                              460       11.3        410.7     1,400.3
Keystone (2)                        282        9.5      2,353.7     2,408.0
Portland                            401        9.8      2,726.6     2,708.6
Seward                              525        9.6      4,221.9     4,367.5
Shawville (2)                       597       10.3      2,787.9     4,108.1
Titus                               243       10.8      1,099.8     1,381.6
Avon Lake                           734        9.3      3,523.5     3,296.2
New Castle                          328       10.6        732.1     1,394.3
Niles                               216       10.5        512.1     1,157.9
                            -----------             ----------- -----------
East Coal Total                   4,626                24,078.7    27,136.7
                            ===========             =========== ===========


                              Q4 YTD commercial
                               capacity factor      Q4 YTD generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Cheswick                          77.5%       94.0%     2,764.4     2,446.1
Conemaugh (2)                     93.2%       81.7%     1,998.6     1,888.2
Elrama                            87.3%       81.8%       358.6     1,145.2
Keystone (2)                      74.7%       97.9%     1,757.9     2,357.7
Portland                          83.7%       79.6%     2,282.0     2,156.1
Seward                            80.6%       86.4%     3,401.9     3,771.9
Shawville (2)                     82.2%       84.4%     2,292.7     3,466.5
Titus                             86.7%       87.3%       953.6     1,206.1
Avon Lake                         88.9%       86.3%     3,131.6     2,844.3
New Castle                        84.6%       90.5%       619.5     1,262.1
Niles                             56.6%       76.1%       289.7       881.7
                            ----------  ----------  ----------- -----------
East Coal Total                   82.4%       86.3%    19,850.5    23,425.9
                            ==========  ==========  =========== ===========


(1)  Unless otherwise indicated, the Company owns a 100% interest in each
     facility listed.
(2)  The Company leases a 100% interest in the Shawville facility, a 16.67%
     interest in the Keystone facility and a 16.45% interest in the
     Conemaugh facility under facility interest lease agreements, which
     expire in 2026, 2034 and 2034, respectively.


    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)


                                                         Q4 economic
                                                       generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)    2009        2008
                            ----------- ----------- ----------- -----------

Aurora                              878       10.5          0.2         1.3
Blossburg                            19       14.6          3.3         0.2
Brunot Island                       289       10.4          0.4           -
Gilbert                             536       11.0          2.2         1.3
Glen Gardner                        160       14.6          0.3         0.6
Hamilton                             20       14.8            -           -
Hunterstown                          60       14.8            -         0.1
Hunterstown CCGT                    810        7.0        346.0       177.8
Mountain                             40       14.3            -         0.4
Orrtanna                             20       14.4            -           -
Portland                            169       11.2            -         0.8
Sayreville                          224       13.8          1.1         0.8
Shawnee                              20       14.0          0.1           -
Shawville (2)                         6       10.2            -           -
Titus                                31       17.4            -           -
Tolna                                39       14.2            -         0.1
Warren                               68       12.8            -           -
Werner                              212       13.8          1.4         0.1
Shelby                              356        9.8            -           -
                            -----------             ----------- -----------
East Gas Total                    3,957                   355.0       183.5
                            ===========             =========== ===========


                                 Q4 commercial
                                capacity factor       Q4 generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Aurora                           100.0%      100.0%         0.2         1.3
Blossburg                        100.0%      100.0%         3.3         0.2
Brunot Island                    100.0%        0.0%         0.4           -
Gilbert                          100.0%      100.0%         2.2         1.3
Glen Gardner                     100.0%      100.0%         0.3         0.6
Hamilton                           0.0%        0.0%           -           -
Hunterstown                        0.0%      100.0%           -         0.1
Hunterstown CCGT                  88.0%       89.2%       304.5       158.6
Mountain                           0.0%      100.0%           -         0.4
Orrtanna                           0.0%        0.0%           -           -
Portland                           0.0%       87.5%           -         0.7
Sayreville                       100.0%      100.0%         1.1         0.8
Shawnee                          100.0%        0.0%         0.1           -
Shawville (2)                      0.0%        0.0%           -           -
Titus                              0.0%        0.0%           -           -
Tolna                              0.0%      100.0%           -         0.1
Warren                             0.0%        0.0%           -           -
Werner                            42.9%        0.0%         0.6           -
Shelby                             0.0%        0.0%           -           -
                            ----------  ----------  ----------- -----------
East Gas Total                    88.1%       89.4%       312.7       164.1
                            ==========  ==========  =========== ===========




                                                       Q4 YTD economic
                                                       generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)    2009        2008
                            ----------- ----------- ----------- -----------

Aurora (3)                          878       10.5         14.2        35.7
Blossburg                            19       14.6          5.9         8.1
Brunot Island                       289       10.4          4.0         2.2
Gilbert                             536       11.0         14.5        38.1
Glen Gardner                        160       14.6          0.6         3.6
Hamilton                             20       14.8          0.6         0.4
Hunterstown                          60       14.8          1.6         2.6
Hunterstown CCGT                    810        7.0      1,999.3     1,194.1
Mountain                             40       14.3          2.0         5.7
Orrtanna                             20       14.4          0.6         0.5
Portland                            169       11.2          2.6        11.1
Sayreville                          224       13.8          2.9        45.0
Shawnee                              20       14.0          0.3         0.1
Shawville (2)                         6       10.2          0.1         0.1
Titus                                31       17.4            -           -
Tolna                                39       14.2          0.5         1.8
Warren                               68       12.8            -           -
Werner                              212       13.8          4.0         9.6
Shelby                              356        9.8          1.0         3.8
                            -----------             ----------- -----------
East Gas Total                    3,957                 2,054.7     1,362.5
                            ===========             =========== ===========


                               Q4 YTD commercial
                                capacity factor     Q4 YTD generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Aurora (3)                        99.3%      100.0%        14.1        35.7
Blossburg                        100.0%       92.6%         5.9         7.5
Brunot Island                    100.0%      100.0%         4.0         2.2
Gilbert                          100.0%      100.0%        14.5        38.1
Glen Gardner                     100.0%       88.9%         0.6         3.2
Hamilton                         100.0%      100.0%         0.6         0.4
Hunterstown                      100.0%      100.0%         1.6         2.6
Hunterstown CCGT                  95.0%       90.6%     1,898.6     1,081.6
Mountain                         100.0%      100.0%         2.0         5.7
Orrtanna                          33.3%      100.0%         0.2         0.5
Portland                         100.0%       99.1%         2.6        11.0
Sayreville                        93.1%       72.2%         2.7        32.5
Shawnee                          100.0%      100.0%         0.3         0.1
Shawville (2)                    100.0%      100.0%         0.1         0.1
Titus                              0.0%        0.0%           -           -
Tolna                            100.0%      100.0%         0.5         1.8
Warren                             0.0%        0.0%           -           -
Werner                            45.0%       84.4%         1.8         8.1
Shelby                           100.0%      100.0%         1.0         3.8
                            ----------  ----------  ----------- -----------
East Gas Total                    95.0%       90.6%     1,951.1     1,234.9
                            ==========  ==========  =========== ===========


(1)  Unless otherwise indicated, the Company owns a 100% interest in each
     facility listed.
(2)  The Company leases a 100% interest in the Shawville facility under a
     facility interest lease agreement, which expires in 2026.
(3)  Excludes generation during periods the unit operated under power
     purchase agreements.


    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

                                                          Q4 economic
                                                        generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)     2009        2008
                            ----------- ----------- ----------- -----------

Bighorn (2)                         598         7.2           -           -
Coolwater                           622        10.1        27.8       228.9
Ellwood (3)                          54        13.3           -           -
Etiwanda (3)                        640        10.0           -           -
Mandalay (3)                        560        10.9        65.0       200.9
Ormond Beach                      1,516         9.6        24.0       171.2
                            -----------             ----------- -----------
West Total                        3,990                   116.8       601.0
                            ===========             =========== ===========


                                Q4 commercial
                               capacity factor        Q4 generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Bighorn (2)                        0.0%        0.0%           -           -
Coolwater                         97.1%       96.0%        27.0       219.8
Ellwood (3)                        0.0%        0.0%           -           -
Etiwanda (3)                       0.0%        0.0%           -           -
Mandalay (3)                      96.0%       98.8%        62.4       198.5
Ormond Beach                      99.6%       82.3%        23.9       140.9
                            ----------  ----------  ----------- -----------
West Total                        97.0%       93.0%       113.3       559.2
                            ==========  ==========  =========== ===========


                                                        Q4 YTD economic
                                                        generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)     2009        2008
                            ----------- ----------- ----------- -----------

Bighorn (2)                         598         7.2           -       582.8
Coolwater                           622        10.1       130.6       592.2
Ellwood (3)                          54        13.3           -           -
Etiwanda (3)                        640        10.0           -           -
Mandalay (3)                        560        10.9       288.5       581.9
Ormond Beach                      1,516         9.6       274.3       797.0
                            -----------             ----------- -----------
West Total                        3,990                   693.4     2,553.9
                            ===========             =========== ===========


                              Q4 YTD commercial
                               capacity factor      Q4 YTD generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Bighorn (2)                        0.0%       94.8%           -       552.7
Coolwater                         50.5%       92.9%        65.9       550.1
Ellwood (3)                        0.0%        0.0%           -           -
Etiwanda (3)                       0.0%        0.0%           -           -
Mandalay (3)                      94.0%       97.0%       271.1       564.3
Ormond Beach                      99.9%       91.1%       274.0       726.1
                            ----------  ----------  ----------- -----------
West Total                        88.1%       93.7%       611.0     2,393.2
                            ==========  ==========  =========== ===========




Other

                                                          Q4 economic
                                                        generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)     2009        2008
                            ----------- ----------- ----------- -----------

Choctaw                             800         7.0         2.4         4.1
Indian River (3)(4)                 587        10.5           -           -
Osceola (3)                         470        11.0           -           -
                            -----------             ----------- -----------
Other Total                       1,857                     2.4         4.1
                            ===========             =========== ===========


                                 Q4 commercial
                                capacity factor       Q4 generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Choctaw                          100.0%      100.0%         2.4         4.1
Indian River (3)(4)                0.0%        0.0%           -           -
Osceola (3)                        0.0%        0.0%           -           -
                            ----------  ----------  ----------- -----------
Other Total                      100.0%      100.0%         2.4         4.1
                            ==========  ==========  =========== ===========


                                                        Q4 YTD economic
                                                        generation (GWh)
                              Capacity   Heat Rate  -----------------------
    Unit Name (1)               (MW)    (MMBtu/MWh)     2009        2008
                            ----------- ----------- ----------- -----------

Choctaw                             800         7.0        75.5        71.0
Indian River (3)(4)                 587        10.5           -           -
Osceola (3)                         470        11.0         1.5         3.5
                            -----------             ----------- -----------
Other Total                       1,857                    77.0        74.5
                            ===========             =========== ===========


                               Q4 YTD commercial
                                capacity factor     Q4 YTD generation (GWh)
                            ----------------------  -----------------------
    Unit Name (1)              2009        2008         2009        2008
                            ----------  ----------  ----------- -----------

Choctaw                           99.1%       81.8%        74.8        58.1
Indian River (3)(4)                0.0%        0.0%           -           -
Osceola (3)                      100.0%      100.0%         1.5         3.5
                            ----------  ----------  ----------- -----------
Other Total                       99.1%       82.7%        76.3        61.6
                            ==========  ==========  =========== ===========


(1)  Unless otherwise indicated, the Company owns a 100% interest in each
     facility listed.
(2)  The Bighorn facility was sold in October 2008.
(3)  Excludes generation during periods the unit operated under power
     purchase agreements.
(4)  This plant was mothballed in January 2010.


    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)


                                      Twelve Months Ended  Projected Annual
                                          December 31,          Outlook
                                         2009      2008      2010E   2011E
                                        ------    ------    ------  ------
                                          (in millions)      (in millions)

Maintenance capital expenditures        $   56    $   56    $   48  $   42
                                        ------    ------    ------  ------
Environmental (1)                          111       206        34      20
Capitalized interest                        23 (2)    17 (2)     6       -
                                        ------    ------    ------  ------
   Total environmental and cap interest    134       223        40      20
                                        ------    ------    ------  ------
      Total capital expenditures        $  190    $  279    $   88  $   62
                                        ======    ======    ======  ======


(1)  The environmental amounts for years beyond 2011 could significantly
     increase subject to finalization of rules and market conditions.
(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)


                          December 31,       December 31,
                              2009               2008             Change
                          ------------       ------------       ----------
                                             (in millions)

Senior secured revolver   $          -       $          -       $        -
Senior secured notes               279                498             (219)
Senior unsecured notes           1,300              1,300                -
Orion Power 12% notes (1)          405                417              (12)
PEDFA fixed-rate bonds
 for Seward plant                  371                408              (37)
                          ------------       ------------       ----------
   GAAP Debt              $      2,355       $      2,623       $     (268)

Orion Power 12% notes
 purchase accounting
 adjustment                         (5)               (17)              12
REMA operating leases
 (off-balance sheet)               423                443              (20)
Debt recorded in
 discontinued operations             -                261             (261)
                          ------------  ---  ------------  ---  ----------
   Gross Debt             $      2,773       $      3,310       $     (537)

Cash and cash
 equivalents                      (943)            (1,004)              61
Restricted cash                    (24)                (3)             (21)
Net margin deposits and
 cash collateral                  (260) (2)          (253) (3)          (7)
                          ------------       ------------       ----------
   Net Debt               $      1,546       $      2,050       $     (504)
                          ============       ============       ==========


(1)  Orion Power 12% notes include purchase accounting adjustment of
     $5 million and $17 million as of December 31, 2009 and 2008,
     respectively.
(2)  Includes $45 million related to discontinued operations and
     $20 million related to cash collateral.
(3)  Includes $295 million related to discontinued operations and
     $18 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.