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NRG Energy, Inc. Reports 2016 Results, Reaffirms 2017 Financial Guidance
- Delivered strong 2016 Adjusted EBITDA, cash from operations and Free Cash Flow before Growth (FCFbG)
- Reaffirming 2017 Adjusted EBITDA, Cash From Operations and FCFbG guidance
-
Corporate debt reduction and preferred stock redemption throughout
2016 under the current program totaled
$1.0 billion ; approximately$100 million 1 of recurring FCFbG -
Exceeded the targeted
$400 million in cost reductions by over$100 million , ahead of the anticipated 2017 time frame -
Executed agreements with
NRG Yield to drop down 311 net MWs of utility-scale solar assets for total cash consideration of$130 million 2 and expanded Right of First Offer (ROFO) pipeline by 234 net MW; raised another$128 million 3 through non-recourse financing at Agua Caliente -
2.2 GW of coal-to-gas conversions and
Petra Nova Project completed on time and on budget -
Recorded
$1.2 billion non-cash asset and goodwill impairment charge
“Our business delivered a year of strong results, both EBITDA and Free
Cash Flow, driven by Retail, which had a record 2016 adjusted EBITDA and
its third consecutive year of EBITDA growth,” said
Consolidated Financial Results |
||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
($ in millions) | 12/31/16 | 12/31/15 | 12/31/16 | 12/31/15 | ||||||||||||
Net Loss | $ | (1,055 | ) | $ | (6,358 | ) | $ | (891 | ) | $ | (6,436 | ) | ||||
Cash From Operations | $ | 339 | $ | (83 | ) | $ | 2,072 | $ | 1,309 | |||||||
Adjusted EBITDAa | $ | 492 | $ | 582 | $ | 3,257 | $ | 3,166 | ||||||||
Free Cash Flow Before Growth (FCFbG) | $ | 78 | $ | (8 | ) | $ | 1,209 | $ | 1,127 |
a. | For comparability, 2015 results have been restated to include the negative contribution from Residential Solar of $43 million and $173 million for the three and twelve months ended December 31, 2015. | |
Segment Results
As part of its streamlining strategy, NRG has realigned its reporting segments to more clearly report Generation and Retail activities. Accordingly, customer-facing businesses will now reside in the Retail segment. The Company's Retail segment will now include Business Solutions which includes Commercial & Industrial (C&I) previously in Generation, and the Generation segment now includes BETM. The results of the Company have been recast to reflect these changes.
Table 1: Net (Loss)/Income |
||||||||||||||||
($ in millions) | Three Months Ended | Twelve Months Ended | ||||||||||||||
Segment | 12/31/16 | 12/31/15 | 12/31/16 | 12/31/15 | ||||||||||||
Generation | $ | (889 | ) | $ | (4,690 | ) | $ | (507 | ) | $ | (4,446 | ) | ||||
Retail | 316 | 161 | 1,045 | 624 | ||||||||||||
Renewables a | (204 | ) | (18 | ) | (306 | ) | (92 | ) | ||||||||
NRG Yield a | (126 | ) | 12 | (15 | ) | 65 | ||||||||||
Corporate b | (152 | ) | (1,823 | ) | (1,108 | ) | (2,587 | ) | ||||||||
Net Loss c | $ | (1,055 | ) | $ | (6,358 | ) | $ | (891 | ) | $ | (6,436 | ) |
a. | In accordance with GAAP, 2015 results have been restated to include full impact of the assets in the NRG Yield Drop Down transactions which closed on November 3, 2015, and September 1, 2016. | |
b. | Includes Residential Solar. | |
c. | Includes mark-to-market gains and losses of economic hedges. | |
The net loss for the twelve months of 2016 was driven by a
Table 2: Adjusted EBITDA |
||||||||||||||||
($ in millions) | Three Months Ended | Twelve Months Ended | ||||||||||||||
Segment | 12/31/16 | 12/31/15 | 12/31/16 | 12/31/15 | ||||||||||||
Generation a | $ | 160 | $ | 300 | $ | 1,505 | $ | 1,759 | ||||||||
Retail | 134 | 149 | 811 | 793 | ||||||||||||
Renewables b | 26 | 27 | 187 | 158 | ||||||||||||
NRG Yield b | 207 | 189 | 899 | 758 | ||||||||||||
Corporate c | (35 | ) | (83 | ) | (145 | ) | (302 | ) | ||||||||
Adjusted EBITDA d | $ | 492 | $ | 582 | $ | 3,257 | $ | 3,166 |
a. | See Appendices A-6 through A-9 for Generation regional Reg G results. | |
b. | In accordance with GAAP, 2015 results have been restated to include full impact of the assets in the NRG Yield Drop Down transactions which closed on November 3, 2015, and September 1, 2016. | |
c. | 2016 includes Residential Solar. 2015 results have been restated to include negative contribution of $43 million and $173 million for the three and twelve months ended December 31, 2015, respectively. | |
d. | See Appendices A-1 through A-4 for Operating Segment Reg G results. | |
Generation: Full year 2016 Adjusted EBITDA was
-
Gulf Coast Region:
$93 million decrease due to lower average realized energy margins inTexas from the decline in power prices, offset by lower operating costs. -
East Region:
$365 million decrease from lower dispatch and capacity prices, partially offset by the monetization of forward hedges and lower operating costs on decreased run times, deactivations and plant sales. -
West Region:
$122 million increase due to gains from sale of real property at Potrero site, emission credit sales and lower operating costs, partially offset by lower capacity revenues. -
Other Generation:
$82 million increase driven by favorable trading results at BETM.
Fourth quarter Adjusted EBITDA was
-
Gulf Coast Region:
$22 million decrease due to lower realized energy margins inTexas . -
East Region:
$128 million lower due to lower realized energy margins and lower capacity prices. -
West Region:
$11 million increase due to higher capacity revenues and lower operating costs.
Retail: Full year 2016 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Renewables: Full year 2016 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Corporate: Full year 2016 Adjusted EBITDA was
Liquidity and Capital Resources
Table 3: Corporate Liquidity |
||||||
($ in millions) | 12/31/16 | 12/31/15 | ||||
Cash at NRG-Level a | $ | 570 | $ | 693 | ||
Revolver | 1,217 | 1,373 | ||||
NRG-Level Liquidity | $ | 1,787 | $ | 2,066 | ||
Restricted cash | 446 | 414 | ||||
Cash at Non-Guarantor Subsidiaries | 1,403 | 825 | ||||
Total Liquidity | $ | 3,636 | $ | 3,305 |
a. | December 31, 2016, balance includes $247 million of unrestricted cash held at Midwest Generation (a non-guarantor subsidiary) which can be distributed to NRG without limitation. | |
NRG-Level cash as of
NRG Strategic Developments
Drop Down Assets and Expanded ROFO Pipeline
In
On
-
A 16% interest (approximately 31% of NRG's 51% interest) in the Agua
Caliente solar project, one of the ROFO Assets, representing ownership
of approximately 46 net MW of capacity. Prior to the agreement, on
February 17, 2017 , NRG decreased its equity investment through an incremental$128 million non-recourse project-level note, after fees, all of which was distributed to NRG. -
NRG's 50% interest in seven utility-scale solar projects located in
Utah representing 265 net MW of capacity. NRG acquired theUtah assets inNovember 2016 for upfront cash consideration of$111 million and subsequent to closing reduced the effective cash consideration paid to$63 million as a result of additional non-recourse project-level financings of$48 million 8 during the fourth quarter of 2016.
In connection with the execution of the definitive agreement, NRG and
-
Buckthorn Solar, a 154 net MW facility located in
Texas with a 25-year PPA withCity of Georgetown -
The Hawaii Solar projects, which have a combined capacity of 80 net MW
with an average PPA of 22 years with the
Hawaiian Electric Company 9
Fleet Optimizations
NRG achieved a significant milestone in its fleet optimization strategy,
completing coal-to-gas projects at three generation facilities across
its fleet. The modified units can generate approximately 2.2 GW. The
three plants include the
Over 2016, NRG continued to grow renewables development opportunities
with acquisitions of 1.7GW of wind and solar assets. As of
On
In 2016, NRG completed the installation of environmental control
upgrades at its 638 MW Avon Lake Unit 9 facility (COD
2017 Guidance
NRG is reaffirming its guidance range for 2017 with respect to Adjusted EBITDA, cash from operations and FCFbG as set forth below.
Table 4: 2017 Adjusted EBITDA and FCF before Growth Guidance |
||
2017 | ||
($ in millions) | Guidance | |
Adjusted EBITDAa | $2,700 - $2,900 | |
Cash From Operations | $1,355 - $1,555 | |
Free Cash Flow - before Growth | $800 - $1,000 |
a. | Non-GAAP financial measure; see Appendix Table A-11 for GAAP Reconciliation to Net Income that excludes fair value adjustments related to derivatives. The Company is unable to provide guidance for Net Income due to the impact of such fair value adjustments related to derivatives in a given year. | |
Capital Allocation Update
On
On
The Company’s common stock dividend, corporate level debt reduction and share repurchases are subject to available capital, market conditions and compliance with associated laws and regulations.
Earnings Conference Call
On
About NRG
NRG is the leading integrated power company in the U.S., built on the
strength of the nation’s largest and most diverse competitive electric
generation portfolio and leading retail electricity platform. A Fortune
200 company, NRG creates value through best in class operations,
reliable and efficient electric generation, and a retail platform
serving residential and commercial customers. Working with electricity
customers, large and small, we continually innovate, embrace and
implement sustainable solutions for producing and managing energy. We
aim to be pioneers in developing smarter energy choices and delivering
exceptional service as our retail electricity providers serve almost 3
million residential and commercial customers throughout the country.
More information is available at www.nrg.com.
Connect with
Safe Harbor Disclosure
In addition to historical information, the information presented in this communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks and uncertainties and can typically be identified by terminology such as “may,” “should,” “could,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “expect,” “intend,” “seek,” “plan,” “think,” “anticipate,” “estimate,” “predict,” “target,” “potential” or “continue,” or the negative of these terms or other comparable terminology. Such forward-looking statements include, but are not limited to, statements about the Company’s future revenues, income, indebtedness, capital structure, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.
Although NRG believes that its expectations are reasonable, it can give
no assurance that these expectations will prove to be correct, and
actual results may vary materially. Factors that could cause actual
results to differ materially from those contemplated herein include,
among others, general economic conditions, hazards customary in the
power industry, weather conditions, including wind and solar
performance, competition in wholesale power markets, the volatility of
energy and fuel prices, failure of customers to perform under contracts,
changes in the wholesale power markets, changes in government
regulations, the condition of capital markets generally, our ability to
access capital markets, unanticipated outages at our generation
facilities, adverse results in current and future litigation, failure to
identify, execute or successfully implement acquisitions, repowerings or
asset sales, our ability to implement value enhancing improvements to
plant operations and companywide processes, our ability to proceed with
projects under development or the inability to complete the construction
of such projects on schedule or within budget, risks related to project
siting, financing, construction, permitting, government approvals and
the negotiation of project development agreements, our ability to
progress development pipeline projects, GenOn’s ability to continue as a
going concern, our ability to obtain federal loan guarantees, the
inability to maintain or create successful partnering relationships, our
ability to operate our businesses efficiently including
NRG undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law. The adjusted EBITDA and free cash
flow guidance are estimates as of February 28, 2017. These estimates are
based on assumptions the company believed to be reasonable as of that
date. NRG disclaims any current intention to update such guidance,
except as required by law. The foregoing review of factors that could
cause NRG’s actual results to differ materially from those contemplated
in the forward-looking statements included in this Earnings press
release should be considered in connection with information regarding
risks and uncertainties that may affect NRG’s future results included in
NRG’s filings with the
1
2 Subject to working capital and other adjustments
3 Net of financing fees
4 Excludes Goal Zero, NRG Home Services and Residential Solar
5 Total impairments of
6 Reflects NRG's net interest based on cash to be distributed in tax equity partnership with Dominion
7 Approximately
8 Net of final construction costs and financing fees
9 61 of the 80 MWs have been contracted as of
10 Cash cost of
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
For the Year Ended December 31, | ||||||||||||
(In millions, except per share amounts) |
2016 | 2015 | 2014 | |||||||||
Operating Revenues | ||||||||||||
Total operating revenues | $ | 12,351 | $ | 14,674 | $ | 15,868 | ||||||
Operating Costs and Expenses | ||||||||||||
Cost of operations | 8,555 | 10,784 | 11,808 | |||||||||
Depreciation and amortization | 1,367 | 1,566 | 1,523 | |||||||||
Impairment losses | 918 | 5,030 | 97 | |||||||||
Selling, general and administrative | 1,101 | 1,199 | 1,016 | |||||||||
Acquisition-related transaction and integration costs | 8 | 10 | 84 | |||||||||
Development costs | 90 | 146 | 88 | |||||||||
Total operating costs and expenses | 12,039 | 18,735 | 14,616 | |||||||||
Gain on sale of assets | 215 | — | 19 | |||||||||
Gain on postretirement benefits curtailment | — | 21 | — | |||||||||
Operating Income/(Loss) | 527 | (4,040 | ) | 1,271 | ||||||||
Other Income/(Expense) | ||||||||||||
Equity in earnings of unconsolidated affiliates | 27 | 36 | 38 | |||||||||
Impairment losses on investments | (268 | ) | (56 | ) | — | |||||||
Other income, net | 42 | 33 | 22 | |||||||||
(Loss)/gain on sale of equity method investment | — | (14 | ) | 18 | ||||||||
Net (loss)/gain on debt extinguishment | (142 | ) | 75 | (95 | ) | |||||||
Interest expense | (1,061 | ) | (1,128 | ) | (1,119 | ) | ||||||
Total other expense | (1,402 | ) | (1,054 | ) | (1,136 | ) | ||||||
(Loss)/Income Before Income Taxes | (875 | ) | (5,094 | ) | 135 | |||||||
Income tax expense | 16 | 1,342 | 3 | |||||||||
Net (Loss)/Income | (891 | ) | (6,436 | ) | 132 | |||||||
Less: Net loss attributable to noncontrolling interests and redeemable |
||||||||||||
noncontrolling interests |
(117 | ) | (54 | ) | (2 | ) | ||||||
Net (Loss)/Income Attributable to NRG Energy, Inc. | (774 | ) | (6,382 | ) | 134 | |||||||
Dividends for preferred shares | 5 | 20 | 56 | |||||||||
Gain on redemption of preferred shares | (78 | ) | — | — | ||||||||
(Loss)/Income Available for Common Stockholders | $ | (701 | ) | $ | (6,402 | ) | $ | 78 | ||||
(Loss)/Earnings Per Share Attributable to NRG Energy, Inc. Common Stockholders | ||||||||||||
Weighted average number of common shares outstanding — basic | 316 | 329 | 334 | |||||||||
Net (Loss)/Income per Weighted Average Common Share — Basic | $ | (2.22 | ) | $ | (19.46 | ) | $ | 0.23 | ||||
Weighted average number of common shares outstanding — diluted | 316 | 329 | 339 | |||||||||
Net (Loss)/Income per Weighted Average Common Share — Diluted | $ | (2.22 | ) | $ | (19.46 | ) | $ | 0.23 | ||||
Dividends Per Common Share | $ | 0.24 | $ | 0.58 | $ | 0.54 | ||||||
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
(In millions) | ||||||||||||
Net (Loss)/Income | $ | (891 | ) | $ | (6,436 | ) | $ | 132 | ||||
Other Comprehensive Income/(Loss), net of tax | ||||||||||||
Unrealized gain/(loss) on derivatives, net of income tax expense/(benefit) |
||||||||||||
of $1, $19, and $(21) |
35 | (15 | ) | (45 | ) | |||||||
Foreign currency translation adjustments, net of income tax benefit of $0, |
||||||||||||
$0, and $5 |
(1 | ) | (11 | ) | (8 | ) | ||||||
Available-for-sale securities, net of income tax benefit of $0, $3, and $2 | 1 | 17 | (7 | ) | ||||||||
Defined benefit plan, net of income tax expense/(benefit) of $0, $69, and $(88) | 3 | 10 | (129 | ) | ||||||||
Other comprehensive income/(loss) | 38 | 1 | (189 | ) | ||||||||
Comprehensive Loss | (853 | ) | (6,435 | ) | (57 | ) | ||||||
Less: Comprehensive (loss)/income attributable to noncontrolling interests |
||||||||||||
and redeemable noncontrolling interests |
(117 | ) | (73 | ) | 8 | |||||||
Comprehensive Loss Attributable to NRG Energy, Inc. | (736 | ) | (6,362 | ) | (65 | ) | ||||||
Dividends for preferred shares | 5 | 20 | 56 | |||||||||
Gain on redemption of preferred shares | (78 | ) | — | — | ||||||||
Comprehensive Loss Available for Common Stockholders | $ | (663 | ) | $ | (6,382 | ) | $ | (121 | ) | |||
NRG ENERGY, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
As of December 31, | |||||||
2016 | 2015 | ||||||
(In millions) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 1,973 | $ | 1,518 | |||
Funds deposited by counterparties | 2 | 106 | |||||
Restricted cash | 446 | 414 | |||||
Accounts receivable — trade | 1,166 | 1,157 | |||||
Inventory | 1,111 | 1,252 | |||||
Derivative instruments | 1,062 | 1,915 | |||||
Cash collateral posted in support of energy risk management activities | 203 | 568 | |||||
Current assets held-for-sale | 9 | 6 | |||||
Prepayments and other current assets | 423 | 455 | |||||
Total current assets | 6,395 | 7,391 | |||||
Property, plant and equipment, net | 17,912 | 18,732 | |||||
Other Assets | |||||||
Equity investments in affiliates | 1,120 | 1,045 | |||||
Notes receivable, less current portion | 17 | 53 | |||||
Goodwill | 662 | 999 | |||||
Intangible assets, net | 2,036 | 2,310 | |||||
Nuclear decommissioning trust fund | 610 | 561 | |||||
Derivative instruments | 189 | 305 | |||||
Deferred income taxes | 225 | 167 | |||||
Non-current assets held-for-sale | 10 | 105 | |||||
Other non-current assets | 1,179 | 1,214 | |||||
Total other assets | 6,048 | 6,759 | |||||
Total Assets | $ | 30,355 | $ | 32,882 | |||
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS (Continued) | ||||||||
As of December 31, | ||||||||
2016 | 2015 | |||||||
(In millions, except share data) | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Current portion of long-term debt and capital leases | $ | 1,220 | $ | 481 | ||||
Accounts payable | 895 | 869 | ||||||
Derivative instruments | 1,084 | 1,721 | ||||||
Cash collateral received in support of energy risk management activities | 2 | 106 | ||||||
Accrued interest expense | 220 | 242 | ||||||
Other accrued expenses | 543 | 568 | ||||||
Current liabilities held-for-sale | — | 2 | ||||||
Other current liabilities | 418 | 386 | ||||||
Total current liabilities | 4,382 | 4,375 | ||||||
Other Liabilities | ||||||||
Long-term debt and capital leases | 18,006 | 18,983 | ||||||
Nuclear decommissioning reserve | 287 | 326 | ||||||
Nuclear decommissioning trust liability | 339 | 283 | ||||||
Postretirement and other benefit obligations | 553 | 588 | ||||||
Deferred income taxes | 20 | 19 | ||||||
Derivative instruments | 294 | 493 | ||||||
Out-of-market contracts, net | 1,040 | 1,146 | ||||||
Non-current liabilities held-for-sale | 12 | 4 | ||||||
Other non-current liabilities | 930 | 900 | ||||||
Total non-current liabilities | 21,481 | 22,742 | ||||||
Total Liabilities | 25,863 | 27,117 | ||||||
2.822% convertible perpetual preferred stock; $0.01 par value; 250,000 shares |
||||||||
issued and outstanding at December 31, 2015 |
— | 302 | ||||||
Redeemable noncontrolling interest in subsidiaries | 46 | 29 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity | ||||||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 417,583,825 |
||||||||
and 416,939,950 shares issued; and 315,443,011 and 314,190,042 shares |
||||||||
outstanding at December 31, 2016 and 2015 |
4 | 4 | ||||||
Additional paid-in capital | 8,358 | 8,296 | ||||||
Accumulated deficit | (3,787 | ) | (3,007 | ) | ||||
Treasury stock, at cost; 102,140,814 and 102,749,908 shares at December 31, |
||||||||
2016 and 2015 |
(2,399 | ) | (2,413 | ) | ||||
Accumulated other comprehensive loss | (135 | ) | (173 | ) | ||||
Noncontrolling interest | 2,405 | 2,727 | ||||||
Total Stockholders' Equity | 4,446 | 5,434 | ||||||
Total Liabilities and Stockholders' Equity | $ | 30,355 | $ | 32,882 | ||||
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
(In millions) | ||||||||||||
Cash Flows from Operating Activities | ||||||||||||
Net (loss)/income | $ | (891 | ) | $ | (6,436 | ) | 132 | |||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||||||
Equity in earnings and distribution of unconsolidated affiliates | 54 | 37 | 49 | |||||||||
Depreciation and amortization | 1,367 | 1,566 | 1,523 | |||||||||
Provision for bad debts | 48 | 64 | 64 | |||||||||
Amortization of nuclear fuel | 49 | 45 | 46 | |||||||||
Amortization of financing costs and debt discount/premiums | 3 | (11 | ) | (12 | ) | |||||||
Adjustment to loss/(gain) on debt extinguishment | 21 | (75 | ) | 25 | ||||||||
Amortization of intangibles and out-of-market contracts | 91 | 81 | 64 | |||||||||
Amortization of unearned equity compensation | 10 | 41 | 42 | |||||||||
Net (gain)/loss on sale of assets and equity method investments | (224 | ) | 14 | (4 | ) | |||||||
Gain on post retirement benefits curtailment | — | (21 | ) | — | ||||||||
Impairment losses | 1,186 | 5,086 | 97 | |||||||||
Changes in derivative instruments | 23 | 233 | (61 | ) | ||||||||
Changes in deferred income taxes and liability for uncertain tax benefits | (43 | ) | 1,326 | (154 | ) | |||||||
Changes in collateral deposits in support of risk management activities | 365 | (381 | ) | 146 | ||||||||
Proceeds from sale of emission allowances | 47 | — | — | |||||||||
Changes in nuclear decommissioning trust liability | 41 | (2 | ) | 19 | ||||||||
Cash provided/(used) by changes in other working capital, net of acquisition and disposition effects: | ||||||||||||
Accounts receivable - trade | (12 | ) | 136 | (2 | ) | |||||||
Inventory | 134 | (26 | ) | (245 | ) | |||||||
Prepayments and other current assets | (39 | ) | 8 | 36 | ||||||||
Accounts payable | (27 | ) | (218 | ) | (12 | ) | ||||||
Accrued expenses and other current liabilities | (39 | ) | (9 | ) | (26 | ) | ||||||
Other assets and liabilities | (92 | ) | (149 | ) | (217 | ) | ||||||
Net Cash Provided by Operating Activities | 2,072 | 1,309 | 1,510 | |||||||||
Cash Flows from Investing Activities | ||||||||||||
Acquisition of businesses, net of cash acquired | (209 | ) | (31 | ) | (2,936 | ) | ||||||
Capital expenditures | (1,244 | ) | (1,283 | ) | (909 | ) | ||||||
(Increase)/decrease in restricted cash, net | (29 | ) | 8 | 57 | ||||||||
(Increase)/decrease in restricted cash to support equity requirements for U.S. DOE funded projects | (3 | ) | 35 | (206 | ) | |||||||
Net cash proceeds from notes receivable | 17 | 18 | 25 | |||||||||
Proceeds from renewable energy grants | 36 | 82 | 916 | |||||||||
Purchases of emission allowances, net of proceeds | (1 | ) | 41 | (16 | ) | |||||||
Investments in nuclear decommissioning trust fund securities | (551 | ) | (629 | ) | (619 | ) | ||||||
Proceeds from sales of nuclear decommissioning trust fund securities | 510 | 631 | 600 | |||||||||
Proceeds from sale of assets, net | 636 | 27 | 203 | |||||||||
Investments in unconsolidated affiliates | (34 | ) | (395 | ) | (103 | ) | ||||||
Other | 48 | 11 | 85 | |||||||||
Net Cash Used by Investing Activities | (824 | ) | (1,485 | ) | (2,903 | ) | ||||||
Cash Flows from Financing Activities | ||||||||||||
Payments of dividends to preferred and common stockholders | (76 | ) | (201 | ) | (196 | ) | ||||||
Net receipts from settlement of acquired derivatives that include financing elements | 151 | 196 | 9 | |||||||||
Payments for treasury stock | — | (437 | ) | (39 | ) | |||||||
Payments for preferred shares | (226 | ) | — | — | ||||||||
Distributions from, net of contributions to, noncontrolling interests in subsidiaries | (156 | ) | 47 | 189 | ||||||||
Proceeds from sale of noncontrolling interests in subsidiaries | — | 600 | 630 | |||||||||
Proceeds from issuance of common stock | 1 | 1 | 21 | |||||||||
Proceeds from issuance of long-term debt | 5,527 | 1,004 | 4,563 | |||||||||
Payments of debt issuance and hedging costs | (89 | ) | (21 | ) | (67 | ) | ||||||
Payments for short and long-term debt | (5,913 | ) | (1,599 | ) | (3,827 | ) | ||||||
Other | (13 | ) | (22 | ) | (18 | ) | ||||||
Net Cash (Used)/Provided by Financing Activities | (794 | ) | (432 | ) | 1,265 | |||||||
Effect of exchange rate changes on cash and cash equivalents | 1 | 10 | (10 | ) | ||||||||
Net Increase/(Decrease) in Cash and Cash Equivalents | 455 | (598 | ) | (138 | ) | |||||||
Cash and Cash Equivalents at Beginning of Period | 1,518 | 2,116 | 2,254 | |||||||||
Cash and Cash Equivalents at End of Period | $ | 1,973 | $ | 1,518 | $ | 2,116 | ||||||
Appendix Table A-1: Fourth Quarter 2016 Adjusted EBITDA
Reconciliation by Operating Segment
The following table
summarizes the calculation of Adj. EBITDA and provides a reconciliation
to net (loss)/income:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | |||||||||||
Net (loss)/income | (889 | ) | 316 | (204 | ) | (126 | ) | (152 | ) | (1,055 | ) | ||||||
Plus: | |||||||||||||||||
Interest expense, net | 9 | — | 22 | 61 | 124 | 216 | |||||||||||
Income tax | 1 | — | (6 | ) | (26 | ) | (48 | ) | (79 | ) | |||||||
Loss on debt extinguishment | — | — | — | — | 23 | 23 | |||||||||||
Depreciation and amortization | 224 | 28 | 47 | 73 | 16 | 388 | |||||||||||
ARO expense | 13 | — | 1 | 1 | 1 | 16 | |||||||||||
Amortization of contracts | (4 | ) | 1 | — | 17 | — | 14 | ||||||||||
Amortization of leases | (12 | ) | — | — | — | — | (12 | ) | |||||||||
EBITDA | (658 | ) | 345 | (140 | ) | — | (36 | ) | (489 | ) | |||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | 6 | — | 23 | 21 | (36 | ) | 14 | ||||||||||
Reorganization costs | — | — | — | — | 3 | 3 | |||||||||||
Deactivation costs | 4 | — | — | — | 1 | 5 | |||||||||||
Other non recurring charges | 1 | 2 | 1 | 3 | (1 | ) | 6 | ||||||||||
Impairment losses | 561 | 1 | 30 | 183 | 20 | 795 | |||||||||||
Impairment losses on investments | — | — | 106 | — | 15 | 121 | |||||||||||
Mark-to-market (MtM) losses/(gains) on economic hedges | 246 | (214 | ) | 6 | — | (1 | ) | 37 | |||||||||
Adjusted EBITDA | 160 | 134 | 26 | 207 | (35 | ) | 492 |
Fourth Quarter 2016 condensed financial information by Operating Segment:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | |||||||||||
Operating revenues | 1,304 | 1,417 | 88 | 249 | (239 | ) | 2,819 | ||||||||||
Cost of sales | 593 | 1,053 | 11 | 13 | (238 | ) | 1,432 | ||||||||||
Economic gross margin | 711 | 364 | 77 | 236 | (1 | ) | 1,387 | ||||||||||
Operations & maintenance and other cost of operationsa | 450 | 91 | 30 | 70 | (28 | ) | 613 | ||||||||||
Selling, marketing, general and administrativeb | 100 | 135 | 17 | 6 | 38 | 296 | |||||||||||
Development costs | 5 | 2 | 15 | — | 1 | 23 | |||||||||||
Other (income)/expense | (4 | ) | 2 | (11 | ) | (47 | ) | 23 | (37 | ) | |||||||
Adjusted EBITDA | 160 | 134 | 26 | 207 | (35 | ) | 492 |
a. | Excludes deactivation costs of $5 million, ARO expense of $16 million and lease amortization of $12 million. | ||
b. | Excludes reorganization costs of $3 million. |
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 2,532 | 14 | 273 | — | — | 2,819 | ||||||||||||
Cost of operations | 1,195 | 1 | 236 | — | — | 1,432 | ||||||||||||
Gross margin | 1,337 | 13 | 37 | — | — | 1,387 | ||||||||||||
Operations & maintenance and other cost of operations | 622 | (4 | ) | — | (5 | ) | — | 613 | ||||||||||
Selling, marketing, general & administrative a | 299 | — | — | — | (3 | ) | 296 | |||||||||||
Development costs | 23 | — | — | — | — | 23 | ||||||||||||
Other expense/(income) b | 1,448 | (161 | ) | — | — | (1,324 | ) | (37 | ) | |||||||||
Net loss | (1,055 | ) | 178 | 37 | 5 | 1,327 | 492 |
a. | Other adj. includes reorganization costs of $3 million. | ||
b. | Other adj. includes impairments. | ||
Appendix Table A-2: Fourth Quarter 2015 Adjusted EBITDA
Reconciliation by Operating Segment
The following table
summarizes the calculation of Adjusted EBITDA and provides a
reconciliation to net (loss)/income:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | ||||||||||||
Net (loss)/income | (4,690 | ) | 161 | (18 | ) | 12 | (1,823 | ) | (6,358 | ) | ||||||||
Plus: | ||||||||||||||||||
Interest expense, net | 17 | — | 19 | 63 | 171 | 270 | ||||||||||||
Income tax | (3 | ) | — | (5 | ) | 4 | 1,389 | 1,385 | ||||||||||
Loss on debt extinguishment | — | — | — | — | (84 | ) | (84 | ) | ||||||||||
Depreciation and amortization | 223 | 33 | 46 | 75 | 16 | 393 | ||||||||||||
ARO expense | 7 | — | — | — | 1 | 8 | ||||||||||||
Amortization of contracts | (4 | ) | 2 | — | 14 | — | 12 | |||||||||||
Amortization of leases | (12 | ) | — | — | — | — | (12 | ) | ||||||||||
EBITDA | (4,462 | ) | 196 | 42 | 168 | (330 | ) | (4,386 | ) | |||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | 4 | — | (32 | ) | 15 | 38 | 25 | |||||||||||
Acquisition-related transaction & integration costs | — | — | — | — | 2 | 2 | ||||||||||||
Reorganization costs | 3 | 3 | 6 | — | 6 | 18 | ||||||||||||
Deactivation costs | 3 | — | — | — | — | 3 | ||||||||||||
Other non recurring charges | 4 | (1 | ) | 2 | 3 | 5 | 13 | |||||||||||
Impairment losses | 4,605 | — | 8 | — | 154 | 4,767 | ||||||||||||
Impairment losses on investments | 14 | — | — | — | 42 | 56 | ||||||||||||
MtM losses/(gains) on economic hedges | 129 | (49 | ) | 1 | 3 | — | 84 | |||||||||||
Adjusted EBITDA | 300 | 149 | 27 | 189 | (83 | ) | 582 |
Fourth Quarter 2015 condensed financial information by Operating Segment:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | ||||||||||||
Operating revenues | 1,538 | 1,423 | 89 | 241 | (189 | ) | 3,102 | |||||||||||
Cost of sales | 670 | 1,064 | 10 | 13 | (193 | ) | 1,564 | |||||||||||
Economic gross margin | 868 | 359 | 79 | 228 | 4 | 1,538 | ||||||||||||
Operations & maintenance and other cost of operations a | 483 | 95 | 3 | 77 | 7 | 665 | ||||||||||||
Selling, marketing, general & administrative b | 93 | 127 | 10 | 3 | 70 | 303 | ||||||||||||
Development costs | 6 | — | 17 | — | 14 | 37 | ||||||||||||
Other expense/(income) c | (14 | ) | (12 | ) | 22 | (41 | ) | (4 | ) | (49 | ) | |||||||
Adjusted EBITDA | 300 | 149 | 27 | 189 | (83 | ) | 582 |
a. | Excludes deactivation costs of $3 million, ARO expense of $8 million and lease amortization of $12 million. | ||
b. | Excludes reorganization costs of $18 million. | ||
c. | Excludes acquisition-related transaction & integration costs of $2 million. | ||
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 3,011 | 12 | 79 | — | — | 3,102 | ||||||||||||
Cost of operations | 1,569 | — | (5 | ) | — | — | 1,564 | |||||||||||
Gross margin | 1,442 | 12 | 84 | — | — | 1,538 | ||||||||||||
Operations & maintenance and other cost of operations | 664 | 4 | — | (3 | ) | — | 665 | |||||||||||
Selling, marketing, general & administrative a | 321 | — | — | — | (18 | ) | 303 | |||||||||||
Development costs | 37 | — | — | — | — | 37 | ||||||||||||
Other expense/(income) b | 6,778 | (436 | ) | — | — | (6,391 | ) | (49 | ) | |||||||||
Net loss | (6,358 | ) | 444 | 84 | 3 | 6,409 | 582 |
a. | Other adj. includes reorganization costs of $18 million. | ||
b. | Other adj. includes impairments and acquisition-related transaction & integration costs. | ||
Appendix Table A-3: Full Year 2016 Adjusted EBITDA Reconciliation by
Operating Segment
The following table summarizes the
calculation of Adj. EBITDA and provides a reconciliation to net
(loss)/income:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | ||||||||||||
Net (loss)/income | (507 | ) | 1,045 | (306 | ) | (15 | ) | (1,108 | ) | (891 | ) | |||||||
Plus: | ||||||||||||||||||
Interest expense, net | 65 | — | 107 | 273 | 601 | 1,046 | ||||||||||||
Income tax | (1 | ) | 1 | (20 | ) | (1 | ) | 37 | 16 | |||||||||
Loss on debt extinguishment | — | — | — | — | 142 | 142 | ||||||||||||
Depreciation and amortization | 702 | 115 | 190 | 297 | 63 | 1,367 | ||||||||||||
ARO expense | 35 | — | 2 | 3 | 2 | 42 | ||||||||||||
Amortization of contracts | (18 | ) | 7 | 1 | 74 | (4 | ) | 60 | ||||||||||
Amortization of leases | (49 | ) | — | — | — | — | (49 | ) | ||||||||||
EBITDA | 227 | 1,168 | (26 | ) | 631 | (267 | ) | 1,733 | ||||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | 30 | — | 42 | 79 | (45 | ) | 106 | |||||||||||
Acquisition-related transaction & integration costs | — | — | — | — | 7 | 7 | ||||||||||||
Reorganization costs | — | 5 | 3 | — | 21 | 29 | ||||||||||||
Deactivation costs | 19 | — | — | — | 2 | 21 | ||||||||||||
(Gain)/loss on sale of business | (223 | ) | — | — | — | 79 | (144 | ) | ||||||||||
Other non recurring charges | 21 | 1 | 1 | 6 | 5 | 34 | ||||||||||||
Impairment losses | 645 | 1 | 56 | 183 | 33 | 918 | ||||||||||||
Impairment losses on investments | 142 | — | 105 | — | 21 | 268 | ||||||||||||
Mark-to-market (MtM) losses/(gains) on economic hedges | 644 | (364 | ) | 6 | — | (1 | ) | 285 | ||||||||||
Adjusted EBITDA | 1,505 | 811 | 187 | 899 | (145 | ) | 3,257 |
Full Year 2016 condensed financial information by Operating Segment:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | ||||||||||||
Operating revenues | 6,451 | 6,338 | 424 | 1,089 | (1,031 | ) | 13,271 | |||||||||||
Cost of sales | 2,835 | 4,688 | 14 | 61 | (1,034 | ) | 6,564 | |||||||||||
Economic gross margin | 3,616 | 1,650 | 410 | 1,028 | 3 | 6,707 | ||||||||||||
Operations & maintenance and other cost of operations a | 1,856 | 341 | 139 | 236 | (20 | ) | 2,552 | |||||||||||
Selling, marketing, general & administrative b | 372 | 492 | 57 | 16 | 135 | 1,072 | ||||||||||||
Development costs | 21 | 4 | 40 | — | 21 | 86 | ||||||||||||
Other (income)/expense c | (138 | ) | 2 | (13 | ) | (123 | ) | 12 | (260 | ) | ||||||||
Adjusted EBITDA | 1,505 | 811 | 187 | 899 | (145 | ) | 3,257 |
a. | Excludes deactivation costs of $21 million, ARO expense of $42 million and lease amortization of $49 million. | ||
b. | Excludes reorganization costs of $29 million. | ||
c. | Excludes acquisition-related transaction & integration costs of $7 million. | ||
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 12,351 | 55 | 865 | — | — | 13,271 | ||||||||||||
Cost of operations | 5,989 | (5 | ) | 580 | — | — | 6,564 | |||||||||||
Gross margin | 6,362 | 60 | 285 | — | — | 6,707 | ||||||||||||
Operations & maintenance and other cost of operations | 2,566 | 7 | — | (21 | ) | — | 2,552 | |||||||||||
Selling, marketing, general & administrative a | 1,101 | — | — | — | (29 | ) | 1,072 | |||||||||||
Development costs | 90 | — | — | — | (4 | ) | 86 | |||||||||||
Other expense/(income) b | 3,496 | (1,205 | ) | — | — | (2,551 | ) | (260 | ) | |||||||||
Net loss | (891 | ) | 1,258 | 285 | 21 | 2,584 | 3,257 |
a. | Other adj. includes reorganization costs of $29 million. | ||
b. | Other adj. includes impairments, gain/(loss) on sale of business and acquisition-related transaction & integration costs. | ||
Appendix Table A-4: Full Year 2015 Adjusted EBITDA Reconciliation by
Operating Segment
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
(loss)/income:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | ||||||||||||
Net (loss)/income | (4,446 | ) | 624 | (92 | ) | 65 | (2,587 | ) | (6,436 | ) | ||||||||
Plus: | ||||||||||||||||||
Interest expense, net | 68 | 1 | 80 | 262 | 704 | 1,115 | ||||||||||||
Income tax | — | 1 | (18 | ) | 12 | 1,347 | 1,342 | |||||||||||
Loss/(gain) on debt extinguishment | — | — | — | 9 | (84 | ) | (75 | ) | ||||||||||
Depreciation and amortization | 896 | 133 | 181 | 297 | 59 | 1,566 | ||||||||||||
ARO expense | 32 | — | — | 2 | 1 | 35 | ||||||||||||
Amortization of contracts | (10 | ) | 6 | 1 | 54 | — | 51 | |||||||||||
Amortization of leases | (50 | ) | — | — | — | — | (50 | ) | ||||||||||
EBITDA | (3,510 | ) | 765 | 152 | 701 | (560 | ) | (2,452 | ) | |||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | 27 | — | (20 | ) | 49 | 34 | 90 | |||||||||||
Acquisition-related transaction & integration costs | — | 1 | — | 3 | 6 | 10 | ||||||||||||
Reorganization costs | 3 | 3 | 6 | — | 6 | 18 | ||||||||||||
Deactivation costs | 11 | — | — | — | — | 11 | ||||||||||||
Gain on sale of business | — | — | (3 | ) | — | — | (3 | ) | ||||||||||
Other non recurring charges | 20 | (12 | ) | 7 | 3 | 16 | 34 | |||||||||||
Impairment losses | 4,827 | 36 | 13 | — | 154 | 5,030 | ||||||||||||
Impairment losses on investments | 14 | — | — | — | 42 | 56 | ||||||||||||
MtM losses on economic hedges | 367 | — | 3 | 2 | — | 372 | ||||||||||||
Adjusted EBITDA | 1,759 | 793 | 158 | 758 | (302 | ) | 3,166 |
Full Year 2015 condensed financial information by Operating Segment:
($ in millions) | Generation | Retail | Renewables | NRG Yield | Corp/Elim | Total | ||||||||||||
Operating revenues | 7,785 | 6,910 | 396 | 1,009 | (1,142 | ) | 14,958 | |||||||||||
Cost of sales | 3,649 | 5,244 | 16 | 71 | (1,134 | ) | 7,846 | |||||||||||
Economic gross margin | 4,136 | 1,666 | 380 | 938 | (8 | ) | 7,112 | |||||||||||
Operations & maintenance and other cost of operations a | 2,058 | 366 | 115 | 248 | 16 | 2,803 | ||||||||||||
Selling, marketing, general & administrative b | 390 | 491 | 47 | 12 | 241 | 1,181 | ||||||||||||
Development costs | 20 | 4 | 61 | — | 61 | 146 | ||||||||||||
Other (income)/expense c | (91 | ) | 12 | (1 | ) | (80 | ) | (24 | ) | (184 | ) | |||||||
Adjusted EBITDA | 1,759 | 793 | 158 | 758 | (302 | ) | 3,166 |
a. | Excludes deactivation costs of $11 million, ARO expense of $35 million and lease amortization of $50 million. | ||
b. | Excludes reorganization costs of $18 million. | ||
c. | Excludes acquisition-related transaction & integration costs of $10 million. | ||
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 14,674 | 40 | 244 | — | — | 14,958 | ||||||||||||
Cost of operations | 7,985 | (11 | ) | (128 | ) | — | — | 7,846 | ||||||||||
Gross margin | 6,689 | 51 | 372 | — | — | 7,112 | ||||||||||||
Operations & maintenance and other cost of operations | 2,799 | 15 | — | (11 | ) | — | 2,803 | |||||||||||
Selling, marketing, general & administrative | 1,199 | — | — | — | (18 | ) | 1,181 | |||||||||||
Development costs | 146 | — | — | — | — | 146 | ||||||||||||
Other expense/(income) a | 8,981 | (2,382 | ) | — | — | (6,783 | ) | (184 | ) | |||||||||
Net loss | (6,436 | ) | 2,418 | 372 | 11 | 6,801 | 3,166 |
a. | Other adj. includes impairments and acquisition-related transaction & integration costs. | ||
Appendix Table A-5: 2016 and 2015 Three Months Ended
The
following table summarizes the calculation of adjusted cash flow
operating activities providing a reconciliation to net cash provided by
operating activities:
Three Months Ended | ||||||
($ in millions) | December 31, 2016 | December 31, 2015 | ||||
Net Cash Provided by Operating Activities | 339 | (83 | ) | |||
Reclassifying of net receipts for settlement of acquired derivatives that include financing elements | 22 | 58 | ||||
Sale of Potrero Land | — | — | ||||
Merger, integration and cost-to-achieve expenses a | (7 | ) | 3 | |||
Return of capital from equity investments | 11 | 38 | ||||
Adjustment for change in collateral | (134 | ) | 201 | |||
Adjusted Cash Flow from Operating Activities | 231 | 217 | ||||
Maintenance CapEx, net b | (58 | ) | (99 | ) | ||
Environmental CapEx, net | (48 | ) | (80 | ) | ||
Preferred dividends | — | (3 | ) | |||
Distributions to non-controlling interests | (47 | ) | (43 | ) | ||
Free Cash Flow - before Growth | 78 | (8 | ) |
a. | Cost-to-achieve expenses associated with the $150 million savings announced on September 2015 call. | ||
b. | Includes insurance proceeds of $4 million in 2016; excludes merger and integration capex of $2 million in 2015. | ||
Twelve Months Ended | ||||||
($ in millions) | December 31, 2016 | December 31, 2015 | ||||
Net Cash Provided by Operating Activities | 2,072 | 1,309 | ||||
Reclassifying of net receipts for settlement of acquired derivatives that include financing elements | 151 | 196 | ||||
Sale of Potrero Land | 74 | — | ||||
Merger, integration and cost-to-achieve expenses a | 40 | 21 | ||||
Return of capital from equity investments | 17 | 38 | ||||
Adjustment for change in collateral | (365 | ) | 381 | |||
Adjusted Cash Flow from Operating Activities | 1,989 | 1,945 | ||||
Maintenance CapEx, net b | (330 | ) | (413 | ) | ||
Environmental CapEx, net | (285 | ) | (237 | ) | ||
Preferred dividends | (2 | ) | (10 | ) | ||
Distributions to non-controlling interests | (163 | ) | (158 | ) | ||
Free Cash Flow - before Growth | 1,209 | 1,127 |
a. | Cost-to-achieve expenses associated with the $150 million savings announced on September 2015 call. | ||
b. | Includes insurance proceeds of $37 million in 2016; excludes merger and integration capex of $11 million in 2015. | ||
Appendix Table A-6: Fourth Quarter 2016 Regional Adjusted EBITDA
Reconciliation for Generation
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
loss:
($ in millions) | East | Gulf Coast | West | Other | Total | ||||||||||
Net loss | (123 | ) | (662 | ) | (92 | ) | (12 | ) | (889 | ) | |||||
Plus: | |||||||||||||||
Interest expense, net | 9 | — | — | — | 9 | ||||||||||
Income tax | — | — | — | 1 | 1 | ||||||||||
Depreciation and amortization | 56 | 157 | 11 | — | 224 | ||||||||||
ARO expense | 2 | 3 | 8 | — | 13 | ||||||||||
Amortization of contracts | (5 | ) | 2 | (1 | ) | — | (4 | ) | |||||||
Amortization of leases | (11 | ) | (1 | ) | — | — | (12 | ) | |||||||
EBITDA | (72 | ) | (501 | ) | (74 | ) | (11 | ) | (658 | ) | |||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | — | (2 | ) | 4 | 4 | 6 | |||||||||
Deactivation costs | 3 | — | 1 | — | 4 | ||||||||||
Other non recurring charges | 3 | 1 | (1 | ) | (2 | ) | 1 | ||||||||
Impairment losses | 118 | 358 | 85 | — | 561 | ||||||||||
Mark-to-market (MtM) losses on economic hedges | 5 | 236 | 5 | — | 246 | ||||||||||
Adjusted EBITDA | 57 | 92 | 20 | (9 | ) | 160 |
Fourth Quarter 2016 condensed financial information for Generation:
($ in millions) | East | Gulf Coast | West | Other | Elims. | Total | ||||||||||||
Operating revenues | 579 | 616 | 100 | (9 | ) | 18 | 1,304 | |||||||||||
Cost of sales | 230 | 304 | 38 | — | 21 | 593 | ||||||||||||
Economic gross margin | 349 | 312 | 62 | (9 | ) | (3 | ) | 711 | ||||||||||
Operations & maintenance and other cost of operationsa | 249 | 185 | 32 | (1 | ) | (15 | ) | 450 | ||||||||||
Selling, marketing, general & administrative | 50 | 37 | 7 | 6 | — | 100 | ||||||||||||
Development costs | 1 | 1 | 3 | — | — | 5 | ||||||||||||
Other (income)/expense | (8 | ) | (3 | ) | — | (5 | ) | 12 | (4 | ) | ||||||||
Adjusted EBITDA | 57 | 92 | 20 | (9 | ) | — | 160 |
a. | Excludes deactivation costs of $4 million, ARO expense of $13 million and lease amortization of $12 million. | ||
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 1,064 | (4 | ) | 244 | — | — | 1,304 | |||||||||||
Cost of operations | 593 | 2 | (2 | ) | — | — | 593 | |||||||||||
Gross margin | 471 | (6 | ) | 246 | — | — | 711 | |||||||||||
Operations & maintenance and other cost of operations | 455 | (1 | ) | — | (4 | ) | — | 450 | ||||||||||
Selling, marketing, general & administrative | 100 | — | — | — | — | 100 | ||||||||||||
Development costs | 5 | — | — | — | — | 5 | ||||||||||||
Other expense/(income) a | 800 | (12 | ) | — | — | (792 | ) | (4 | ) | |||||||||
Net loss | (889 | ) | 7 | 246 | 4 | 792 | 160 |
a. | Other adj. includes impairments. | ||
Appendix Table A-7: Fourth Quarter 2015 Regional Adjusted EBITDA
Reconciliation for Generation
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
loss:
($ in millions) | East | Gulf Coast | West | Other | Total | ||||||||||
Net loss | (164 | ) | (4,488 | ) | (25 | ) | (13 | ) | (4,690 | ) | |||||
Plus: | |||||||||||||||
Interest expense, net | 16 | — | — | 1 | 17 | ||||||||||
Income tax | — | — | — | (3 | ) | (3 | ) | ||||||||
Depreciation and amortization | 92 | 119 | 11 | 1 | 223 | ||||||||||
ARO expense | 4 | 1 | 2 | — | 7 | ||||||||||
Amortization of contracts | (6 | ) | — | 2 | — | (4 | ) | ||||||||
Amortization of leases | (12 | ) | (1 | ) | — | 1 | (12 | ) | |||||||
EBITDA | (70 | ) | (4,369 | ) | (10 | ) | (13 | ) | (4,462 | ) | |||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | — | (1 | ) | 2 | 3 | 4 | |||||||||
Reorganization costs | — | 3 | — | — | 3 | ||||||||||
Deactivation costs | 3 | — | — | — | 3 | ||||||||||
Other non recurring charges | 15 | (19 | ) | 6 | 2 | 4 | |||||||||
Impairment losses | 214 | 4,383 | 8 | — | 4,605 | ||||||||||
Impairment losses on investments | — | 14 | — | — | 14 | ||||||||||
MtM losses on economic hedges | 23 | 103 | 3 | — | 129 | ||||||||||
Adjusted EBITDA | 185 | 114 | 9 | (8 | ) | 300 |
Fourth Quarter 2015 condensed financial information for Generation:
($ in millions) | East | Gulf Coast | West | Other | Elims. | Total | ||||||||||||
Operating revenues | 773 | 668 | 109 | (8 | ) | (4 | ) | 1,538 | ||||||||||
Cost of sales | 290 | 330 | 50 | — | — | 670 | ||||||||||||
Economic gross margin | 483 | 338 | 59 | (8 | ) | (4 | ) | 868 | ||||||||||
Operations & maintenance and other cost of operationsa | 263 | 197 | 38 | (1 | ) | (14 | ) | 483 | ||||||||||
Selling, marketing, general & administrativeb |
29 | 33 | 14 | 17 | — | 93 | ||||||||||||
Development costs | 2 | 1 | 3 | — | — | 6 | ||||||||||||
Other expense/(income) | 4 | (7 | ) | (5 | ) | (16 | ) | 10 | (14 | ) | ||||||||
Adjusted EBITDA | 185 | 114 | 9 | (8 | ) | — | 300 |
a. | Excludes deactivation costs of $3 million. ARO expense of $7 million and lease amortization of $12 million. | ||
b. | Excludes reorganization costs of $3 million. | ||
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 1,404 | (3 | ) | 137 | — | — | 1,538 | |||||||||||
Cost of operations | 661 | (1 | ) | 10 | — | — | 670 | |||||||||||
Gross margin | 743 | (2 | ) | 127 | — | — | 868 | |||||||||||
Operations & maintenance and other cost of operations | 481 | 5 | — | (3 | ) | — | 483 | |||||||||||
Selling, marketing, general & administrative a | 96 | — | — | — | (3 | ) | 93 | |||||||||||
Development costs | 6 | — | — | — | — | 6 | ||||||||||||
Other expense/(income) b | 4,850 | (12 | ) | — | — | (4,852 | ) | (14 | ) | |||||||||
Net loss | (4,690 | ) | 5 | 127 | 3 | 4,855 | 300 |
a. | Other adj. includes reorganization costs of $3 million. | ||
b. | Other adj. includes impairments. | ||
Appendix Table A-8: Full Year 2016 Regional Adjusted EBITDA
Reconciliation for Generation
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss)
($ in millions) | East | Gulf Coast | West | Other | Total | ||||||||||
Net income/(loss) | 373 | (911 | ) | (19 | ) | 50 | (507 | ) | |||||||
Plus: | |||||||||||||||
Interest expense, net | 65 | 1 | — | (1 | ) | 65 | |||||||||
Income tax | — | (2 | ) | — | 1 | (1 | ) | ||||||||
Depreciation and amortization | 212 | 432 | 57 | 1 | 702 | ||||||||||
ARO expense | 7 | 11 | 17 | — | 35 | ||||||||||
Amortization of contracts | (22 | ) | 6 | (4 | ) | 2 | (18 | ) | |||||||
Amortization of leases | (47 | ) | (2 | ) | — | — | (49 | ) | |||||||
EBITDA | 588 | (465 | ) | 51 | 53 | 227 | |||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | — | 3 | 11 | 16 | 30 | ||||||||||
Deactivation costs | 18 | — | 1 | — | 19 | ||||||||||
Gain on sale of assets | (217 | ) | — | (6 | ) | — | (223 | ) | |||||||
Other non recurring charges | 7 | 16 | (1 | ) | (1 | ) | 21 | ||||||||
Impairments | 135 | 367 | 143 | — | 645 | ||||||||||
Impairment losses on investments | — | 142 | — | — | 142 | ||||||||||
Mark-to-market (MtM) losses on economic hedges | 180 | 444 | 20 | — | 644 | ||||||||||
Adjusted EBITDA | 711 | 507 | 219 | 68 | 1,505 |
Full Year 2016 condensed financial information for Generation:
($ in millions) | East | Gulf Coast | West | Other | Elims. | Total | ||||||||||||
Operating revenues | 3,241 | 2,705 | 458 | 62 | (15 | ) | 6,451 | |||||||||||
Cost of sales | 1,300 | 1,386 | 149 | — | — | 2,835 | ||||||||||||
Economic gross margin | 1,941 | 1,319 | 309 | 62 | (15 | ) | 3,616 | |||||||||||
Operations & maintenance and other cost of operations a | 1,048 | 684 | 138 | 1 | (15 | ) | 1,856 | |||||||||||
Selling, marketing, general & administrative | 183 | 135 | 31 | 23 | — | 372 | ||||||||||||
Development costs | 4 | 3 | 14 | — | — | 21 | ||||||||||||
Other (income)/expense | (5 | ) | (10 | ) | (93 | ) | (30 | ) | — | (138 | ) | |||||||
Adjusted EBITDA | 711 | 507 | 219 | 68 | — | 1,505 |
a. | Excludes deactivation costs of $19 million, ARO expense of $35 million and lease amortization of $49 million. |
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 5,679 | (15 | ) | 787 | — | — | 6,451 | |||||||||||
Cost of operations | 2,689 | 3 | 143 | — | — | 2,835 | ||||||||||||
Gross Margin | 2,990 | (18 | ) | 644 | — | — | 3,616 | |||||||||||
Operations & maintenance and other cost of operations | 1,861 | 14 | — | (19 | ) | — | 1,856 | |||||||||||
Selling, marketing, general & administrative | 372 | — | — | — | — | 372 | ||||||||||||
Development costs | 22 | — | — | — | (1 | ) | 21 | |||||||||||
Other expense/(income) a | 1,242 | (64 | ) | — | — | (1,316 | ) | (138 | ) | |||||||||
Net loss | (507 | ) | 32 | 644 | 19 | 1,317 | 1,505 |
a. | Other adj. includes impairments. | ||
Appendix Table A-9: Full Year 2015 Regional Adjusted EBITDA
Reconciliation for Generation
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss)
($ in millions) | East | Gulf Coast | West | Other | Total | |||||
Net income/(loss) | 17 | (4,439 | ) | 5 | (29 | ) | (4,446 | ) | ||
Plus: | ||||||||||
Interest expense, net | 68 | — | 1 | (1 | ) | 68 | ||||
Depreciation and amortization | 299 | 546 | 51 | — | 896 | |||||
ARO expense | 14 | 6 | 12 | — | 32 | |||||
Amortization of contracts | (19 | ) | 5 | 2 | 2 | (10 | ) | |||
Amortization of leases | (47 | ) | (3 | ) | — | — | (50 | ) | ||
EBITDA | 332 | (3,885 | ) | 71 | (28 | ) | (3,510 | ) | ||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | — | 3 | 8 | 16 | 27 | |||||
Reorganization costs | — | 3 | — | — | 3 | |||||
Deactivation costs | 8 | — | 3 | — | 11 | |||||
Other non recurring charges | 24 | (1 | ) | (1 | ) | (2 | ) | 20 | ||
Impairment losses | 436 | 4,383 | 8 | — | 4,827 | |||||
Impairment losses on investments | — | 14 | — | — | 14 | |||||
MtM losses on economic hedges | 276 | 83 | 8 | — | 367 | |||||
Adjusted EBITDA | 1,076 | 600 | 97 | (14 | ) | 1,759 |
Full Year 2015 condensed financial information for Generation:
($ in millions) | East | Gulf Coast | West | Other | Elims. | Total | ||||||
Operating revenues | 4,291 | 3,054 | 475 | (21 | ) | (14 | ) | 7,785 | ||||
Cost of sales | 1,891 | 1,566 | 192 | — | — | 3,649 | ||||||
Economic gross margin | 2,400 | 1,488 | 283 | (21 | ) | (14 | ) | 4,136 | ||||
Operations & maintenance and other cost of operations a | 1,162 | 756 | 153 | 1 | (14 | ) | 2,058 | |||||
Selling, marketing, general & administrative b | 170 | 147 | 44 | 29 | — | 390 | ||||||
Development costs | 3 | 9 | 8 | — | — | 20 | ||||||
Other (income)/expense | (11 | ) | (24 | ) | (19 | ) | (37 | ) | — | (91 | ) | |
Adjusted EBITDA | 1,076 | 600 | 97 | (14 | ) | — | 1,759 |
a. | Excludes deactivation costs of $11 million, ARO expense of $32 million and lease amortization of $50 million. | ||
b. | Excludes reorganization cost of $3 million. | ||
The following table reconciles the condensed financial information to Adjusted EBITDA:
Condensed |
|
|||||||||||||||||
financial |
Interest, tax, |
|
Adjusted | |||||||||||||||
($ in millions) | information |
depr., amort. |
MtM | Deactivation |
Other adj. |
EBITDA | ||||||||||||
Operating revenues | 7,546 | (15 | ) | 254 | — | — | 7,785 | |||||||||||
Cost of operations | 3,767 | (5 | ) | (113 | ) | — | — | 3,649 | ||||||||||
Gross margin | 3,779 | (10 | ) | 367 | — | — | 4,136 | |||||||||||
Operations & maintenance and other cost of operations | 2,051 | 18 | — | (11 | ) | — | 2,058 | |||||||||||
Selling, marketing, general & administrative | 393 | — | — | — | (3 | ) | 390 | |||||||||||
Development costs | 20 | — | — | — | — | 20 | ||||||||||||
Other expense/(income) a | 5,761 | (68 | ) | — | — | (5,784 | ) | (91 | ) | |||||||||
Net loss | (4,446 | ) | 40 | 367 | 11 | 5,787 | 1,759 |
a. | Other adj. includes impairments and acquisition-related transaction & integration costs. | ||
Appendix Table A-10: Full Year 2016 Sources and Uses of Liquidity
The
following table summarizes the sources and uses of liquidity for the
full year 2016:
Twelve Months Ended | |||
($ in millions) | December 31, 2016 | ||
Sources: | |||
Adjusted cash flow from operations | 1,989 | ||
Asset sales | 562 | ||
Issuance of NRG Yield Senior Notes due 2026 | 350 | ||
Monetization of capacity revenues at Midwest Gen, net of payments | 253 | ||
Collateral | 365 | ||
Issuance of CVSR HoldCo debt | 200 | ||
Issuance of NYLD 3.55% Series D notes (NRG Energy Center Minneapolis) | 125 | ||
Capistrano debt proceeds, net of debt repayment | 108 | ||
Tax Equity Proceeds | 11 | ||
Uses: | |||
Debt repayments, net of proceeds (corporate-level) | (774 | ) | |
Maintenance and environmental capex, net a | (615 | ) | |
Growth investments and acquisitions, net | (564 | ) | |
Debt repayments, non-discretionary | (399 | ) | |
Proceeds from NRG Yield revolver, net of payments | (306 | ) | |
Redemption of convertible preferred stock | (226 | ) | |
Distributions to non-controlling interests | (163 | ) | |
Decrease in credit facility availability | (156 | ) | |
Capistrano distribution of debt proceeds to non-controlling interests | (87 | ) | |
Debt Issuance Costs | (89 | ) | |
Debt Repayment, Peaker Finco | (76 | ) | |
Common and Preferred Stock Dividends | (76 | ) | |
Merger, integration and cost-to-achieve expenses b | (40 | ) | |
Other Investing and Financing | (61 | ) | |
Change in Total Liquidity | 331 |
a. | Includes insurance proceeds of $37 million. | ||
b. | Cost-to-achieve expenses associated with the $150 million savings announced on September 2015 call. | ||
Appendix Table A-11: 2017 Adjusted EBITDA Guidance Reconciliation
The
following table summarizes the calculation of Adjusted EBITDA providing
reconciliation to net income:
2017 Adjusted EBITDA | ||||
($ in millions) | Low | High | ||
GAAP Net Income a | 60 | 260 | ||
Income Tax | 80 | 80 | ||
Interest Expense & Debt Extinguishment Costs | 1,155 | 1,155 | ||
Depreciation, Amortization, Contract Amortization and ARO Expense | 1,235 | 1,235 | ||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | 110 | 110 | ||
Other Costs b | 60 | 60 | ||
Adjusted EBITDA | 2,700 | 2,900 |
a. | For purposes of guidance, fair value adjustments related to derivatives are assumed to be zero. | ||
b. | Includes deactivation costs, gain on sale of businesses, reorganization costs, asset write-offs, impairments and other non-recurring charges | ||
Appendix Table A-12: 2017 FCFbG Guidance Reconciliation
The
following table summarizes the calculation of Free Cash Flow before
Growth providing reconciliation to Cash from Operations:
|
2017 | ||
($ in millions) | Guidance | ||
Adjusted EBITDA | $2,700 - $2,900 | ||
Cash Interest payments | (1,065) | ||
Debt Extinguishment Cash Cost | 0 | ||
Cash Income tax | (40) | ||
Collateral / working capital / other | (240) | ||
Cash From Operations | $1,355 - $1,555 | ||
|
|||
Adjustments: Acquired Derivatives, Cost-to-Achieve, Return of Capital |
|||
Dividends, Collateral and Other | 0 | ||
Adjusted Cash flow from operations | $1,355 - $1,555 | ||
Maintenance capital expenditures, net | (310) - (340) | ||
Environmental capital expenditures, net | (10) - (30) | ||
Preferred dividends | 0 | ||
Distributions to non-controlling interests | (185) - (205) | ||
Free Cash Flow - before Growth | $800 - $1,000 | ||
EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of Adjusted EBITDA should not be construed as an inference that NRG’s future results will be unaffected by unusual or non-recurring items.
EBITDA represents net income before interest (including loss on debt extinguishment), taxes, depreciation and amortization. EBITDA is presented because NRG considers it an important supplemental measure of its performance and believes debt-holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:
- EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;
- EBITDA does not reflect changes in, or cash requirements for, working capital needs;
- EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments;
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
- Other companies in this industry may calculate EBITDA differently than NRG does, limiting its usefulness as a comparative measure.
Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to use to invest in the growth of NRG’s business. NRG compensates for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only supplementally. See the statements of cash flow included in the financial statements that are a part of this news release.
Adjusted EBITDA is presented as a further supplemental measure of operating performance. As NRG defines it, Adjusted EBITDA represents EBITDA excluding impairment losses, gains or losses on sales, dispositions or retirements of assets, any mark-to-market gains or losses from accounting for derivatives, adjustments to exclude the Adjusted EBITDA related to the non-controlling interest, gains or losses on the repurchase, modification or extinguishment of debt, the impact of restructuring and any extraordinary, unusual or non-recurring items plus adjustments to reflect the Adjusted EBITDA from our unconsolidated investments. The reader is encouraged to evaluate each adjustment and the reasons NRG considers it appropriate for supplemental analysis. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to EBITDA. In addition, in evaluating Adjusted EBITDA, the reader should be aware that in the future NRG may incur expenses similar to the adjustments in this news release.
Management believes Adjusted EBITDA is useful to investors and other users of NRG's financial statements in evaluating its operating performance because it provides an additional tool to compare business performance across companies and across periods and adjusts for items that we do not consider indicative of NRG’s future operating performance. This measure is widely used by debt-holders to analyze operating performance and debt service capacity and by equity investors to measure our operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Management uses Adjusted EBITDA as a measure of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations, and for evaluating actual results against such expectations, and in communications with NRG's Board of Directors, shareholders, creditors, analysts and investors concerning its financial performance.
Adjusted cash flow from operating activities is a non-GAAP measure NRG provides to show cash from operations with the reclassification of net payments of derivative contracts acquired in business combinations from financing to operating cash flow, as well as the add back of merger, integration and related restructuring costs. The Company provides the reader with this alternative view of operating cash flow because the cash settlement of these derivative contracts materially impact operating revenues and cost of sales, while GAAP requires NRG to treat them as if there was a financing activity associated with the contracts as of the acquisition dates. The Company adds back merger, integration related restructuring costs as they are one time and unique in nature and do not reflect ongoing cash from operations and they are fully disclosed to investors.
Free cash flow (before Growth) is adjusted cash flow from operations less maintenance and environmental capital expenditures, net of funding, preferred stock dividends and distributions to non-controlling interests and is used by NRG predominantly as a forecasting tool to estimate cash available for debt reduction and other capital allocation alternatives. The reader is encouraged to evaluate each of these adjustments and the reasons NRG considers them appropriate for supplemental analysis. Because we have mandatory debt service requirements (and other non-discretionary expenditures) investors should not rely on free cash flow before Growth as a measure of cash available for discretionary expenditures.
Free Cash Flow before Growth is utilized by Management in making decisions regarding the allocation of capital. Free Cash Flow before Growth is presented because the Company believes it is a useful tool for assessing the financial performance in the current period. In addition, NRG’s peers evaluate cash available for allocation in a similar manner and accordingly, it is a meaningful indicator for investors to benchmark NRG's performance against its peers. Free Cash Flow before Growth is a performance measure and is not intended to represent net income (loss), cash from operations (the most directly comparable U.S. GAAP measure), or liquidity and is not necessarily comparable to similarly titled measures reported by other companies.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170228005948/en/
Source:
NRG Energy, Inc.
Media:
Marijke Shugrue, 609-524-5262
or
Investors:
Kevin
L. Cole, CFA, 609-524-4526
or
Lindsey Puchyr, 609-524-4527