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SEC Filing Details

10-K
NRG ENERGY, INC. filed this Form 10-K on 03/01/2018
Entire Document
 

Transformation Plan
NRG is in the process of executing its Transformation Plan, which is designed to significantly strengthen earnings and cost competitiveness, lower risk and volatility, and create significant shareholder value. The Company expects to fully implement the Transformation Plan by the end of 2020 with significant completion by the end of 2018. The three-part, three-year plan is comprised of the following targets and the Company's progress toward achieving such targets are as follows:
Operations and cost excellence
 
 
Cost savings and margin enhancement of $1,065 million recurring, which consists of $590 million of annual cost savings, a $215 million net margin enhancement program, $50 million annual reduction in maintenance capital expenditures, and $210 million in permanent selling, general and administrative expense reduction associated with asset sales.
• During the year ended December 31, 2017, the Company realized annual cost savings of $150 million.

Portfolio optimization
 
 
Targeting up to $3.2 billion of asset sale cash proceeds, including divestitures of 6 GWs of conventional generation and businesses (excluding GenOn) and the expected monetization of 100% of its interest in NRG Yield, Inc. and its renewables platform.
• On February 6, 2018, NRG announced agreements to sell (i) NRG's full ownership interest in NRG Yield, Inc. and NRG's renewables platform, a 3,440 MW portfolio, for cash of $1.375 billion, subject to certain adjustments; and (ii) NRG's South Central business, a 3,555 MW portfolio of generation assets, for cash of $1.0 billion, subject to certain adjustments. The transactions are subject to customary closing conditions and are expected to close in the second half of 2018.

• Also on February 6, 2018, NRG entered into agreements with NRG Yield, Inc. to sell Carlsbad Energy Center, a 527 MW natural gas fired project, for cash of $365 million, subject to certain adjustments, and Buckthorn Solar, a 154 MW solar facility, for cash of $42 million, subject to certain adjustments.

• On February 23, 2018, NRG entered into an agreement to sell BETM for $70 million. The transaction is subject to customary closing conditions and is expected to close in the second half of 2018.

• In 2017, NRG executed asset sales of 322 MW for aggregate cash of $150 million, which includes sales to NRG Yield, Inc. and sale of Minnesota wind projects to third parties.

Capital structure and allocation enhancement
 
 
A prioritized capital allocation strategy that targets a reduction in consolidated debt from approximately $19.5 billion ($18 billion net debt) to approximately $6.5 billion ($6 billion net debt). Following the completion of the contemplated asset sales, the Company expects approximately $5.3 billion in excess cash to be available for allocation through 2020, after achieving its targeted 3.0x net debt / Adjusted EBITDA corporate credit ratio.
• During 2017, NRG reduced its net corporate debt by $604 million.

• Expected reduction in non-recourse debt related to the sale of NRG's ownership in NRG Yield, Inc. and the NRG renewables platform and the sales of Carlsbad Energy Center and Buckthorn Solar, which represented $7.1 billion as of December 31, 2017.

Working Capital and Costs to Achieve
 
 
The Company expects to realize (i) $370 million of non-recurring working capital improvements through 2020, and (ii) approximately $290 million one-time costs to achieve.
• During 2017, NRG realized $221 million of working capital improvements and $44 million of one-time costs to achieve.

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