If you think that the financials for independent power producer NRG Energy (NYSE:NRG) are just too confusing, convoluted, or plain ugly to make it worth your consideration as an investment, I can understand. After all, we at The Motley Fool are all about keeping things simple, investing within our comfort zones, and buying stocks that we know we can follow and evaluate. But if you're a bit more patient or intrepid, you might want to take a closer look.

Revenue and earnings both appear to have exceeded expectations for the quarter. Operating revenue rose 33%, while net income per share more than tripled -- and that's without adding back some theoretically one-time items.

Nice as that is, earnings and revenue aren't really the main drivers of stock valuation here -- adjusted EBITDA and free cash flow garner most of the attention. Adjusted EBITDA, without mark-to-market adjustments for hedging deals, grew 30%. Free cash flow doesn't look quite so good, until you realize that the calculation excludes more than $400 million because of collateral obligations for hedging deals.

So what do I like about NRG? Well, it seems that power prices are recovering, and NRG owns quite a bit of lower-cost coal-fired generating assets. It also benefits from having a higher percentage of its power base devoted to baseload supply, compared to others like Dynegy (NYSE:DYN). An ongoing conversion to Powder River Basin coal should improve both profitability and environmental compliance. Last and certainly not least, the company recently reaped some favorable financing terms; the interest savings there led management to boost its free cash flow estimate for 2006 to nearly $1.1 billion.

I can understand why investors who got burned a few years back by Calpine (NASDAQ:CPNLQ) or other independent power producers such as AES (NYSE:AES) or Mirant (NYSE:MIR) would be gun-shy. I think it's important to remember, though, that NRG is a different company today, and it's a different environment for power producers. There is some risk here of lower natural gas prices; electricity rates are often set based upon gas generation, and lower natural gas prices reduce the company's margin advantage from burning coal. However, I think this one is worth a closer look for investors who aren't put off by the admittedly obtuse accounting.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).