|NRG ENERGY, INC. filed this Form 10-K on 02/29/2016|
The Company is currently executing several cost reduction initiatives including: (i) planned annual cost savings of $150 million through the streamlining of administrative, marketing and development functions in 2016; (ii) an annual cost reduction of $100 million associated with the Company's operations and maintenance spend in 2016; and (iii) a reduction in NRG's capital expenditure program of approximately $100 million through the elimination of certain fuel conversion projects at GenOn plants.
Cash Proceeds from NRG Yield, Inc. Class C Common Stock and Convertible Notes
On June 29, 2015, NRG Yield, Inc. issued 28,198,000 shares of its Class C common stock for net proceeds of $599 million and closed on its offering of $287.5 million aggregate principal amount of 3.25% Convertible Senior Notes due 2020, or the NRG Yield 2020 Convertible Notes. The NRG Yield 2020 Convertible Notes are convertible, under certain circumstances, into NRG Yield, Inc. Class C common stock, cash or a combination thereof at an initial conversion price of $27.50 per Class C common share, which is equivalent to an initial conversion rate of approximately 36.3636 shares of Class C common stock per $1,000 principal amount of notes. The proceeds from the Class C Common Stock and the NRG Yield 2020 Convertible Notes issuances were used to fund the purchase of 25% of the membership interest in Desert Sunlight Investment Holdings, LLC and to repay all of the outstanding project indebtedness associated with the Alta X and Alta XI wind facilities.
Cash Proceeds from Sale of Assets to NRG Yield, Inc.
On November 3, 2015, the Company sold 75% of the Class B interests of NRG Wind TE Holdco, which owns a portfolio of twelve wind facilities totaling 814 net MW, to NRG Yield, Inc. for total cash consideration of $209 million, subject to working capital adjustments. NRG Yield, Inc. is responsible for its pro-rata share of non-recourse project debt of $193 million and noncontrolling interest associated with a tax equity structure of $159 million (as of the acquisition date). In February 2016, the Company made a final working capital payment of $2 million to NRG Yield, Inc. reducing total cash consideration to $207 million.
The sale was recorded as a transfer of entities under common control and the related assets were transferred at carrying value. NRG Yield, Inc. utilized borrowings under its revolving credit facility to fund the acquisition.
On January 2, 2015, the Company sold the following facilities to NRG Yield, Inc.: (i) Walnut Creek, a 485 MW natural gas facility located in City of Industry, California; (ii) the Tapestry projects, which include Buffalo Bear, a 19 MW wind facility in Buffalo, Oklahoma; Pinnacle, a 55 MW wind facility in Keyser, West Virginia; and Taloga, a 130 MW wind facility in Putnam, Oklahoma; and (iii) Laredo Ridge, an 80 MW wind facility located in Petersburg, Nebraska. NRG Yield, Inc. paid total cash consideration of $489 million, including $9 million of working capital adjustments, plus assumed project level debt of $737 million. The sale was recorded as a transfer of entities under common control and the related assets were transferred at carrying value. NRG Yield, Inc. utilized cash on hand and borrowings of $210 million under its revolving credit facility to fund the acquisition.