Sometimes, through no deliberate fault of their own, companies produce earnings reports that only a hard-core accountant or derivatives freak could love. With gobs of hedging activities, and the resultant impacts on earnings and cash flow, NRG Energy (NYSE:NRG) is a company with what I think you could charitably call an "above-average" difficulty level for individual investors. The odd thing, though, is that this independent power producer could prove to be worth the trouble to analyze.

From the get-go, third-quarter earnings analysis is marred by what you do or do not choose to include in your consideration. For instance, revenue rose 26% as reported but climbed 54% without the impact of mark-to-market accruals relating to hedging activities. Likewise for earnings before interest, taxes, depreciation, and amortization. EBITDA looks like it was up about 36% over last year, if you exclude sizable mark-to-market losses.

Even cash flow is no safe haven here. The company's hedging activities require cash collateral deposits, and that depresses reported free cash flow in the period. In fact, the impact of these collateral demands led the company to cut its operating cash flow estimate to $109 million for the year versus the prior estimate of $419 million. On the bright side, though, this money isn't "lost" and will roll off in time.

If you want to look at more basic performance metrics, though, there are some fairly easily understood positives. Domestic power generation increased by about 14%, with a 42% jump in the Northeast linked mostly to oil and gas-fired facilities. The company also saw good EBITDA performance tied to improved margins in the regional businesses and emission credit sales.

With a management team focused on maintaining financial flexibility and targeting return on invested capital, NRG could be well-positioned to exploit the improving fundamentals in the power business. What's more, since it's not burdened with debt like Calpine (NYSE:CPN) is, NRG could pursue more deals like the recently announced acquisition of Texas Genco. Targets could include the likes of Reliant Energy (NYSE:RRI) or Mirant, or perhaps other closely held assets.

We here at The Motley Fool generally recommend that investors stick to ideas that they can understand and follow easily. While I think that diving into NRG Energy's financials just takes a bit of patience and effort, I can understand how some may decide it's too obscure for them. For more intrepid types, though, this could be an interesting play on the increasingly wild and wooly wholesale power sector.

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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).