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NRG Energy, Inc. Reports Record 2015 Adjusted EBITDA Results, Reaffirms 2016 Financial Guidance, Announces Retirement of $691 Million of Debt, and Realigns Dividend
2015 Results and Financial Highlights
-
Record Adjusted EBITDA1 of
$3,340 million , including best ever results from NRG Home Retail since 2009 acquisition – a validation of NRG’s leading integrated competitive power platform -
$1,127 million of Free Cash Flow (FCF) before growth investments -
Over
$1.3 billion of capital returned to stakeholders-
$691 million of debt retired2; approximately$54 million in annual interest savings -
$628 million returned to shareholders in 2015
-
-
$786 million ofNRG Yield dropdown proceeds in 2015 -
$5.1 billion and$3.0 billion non-cash one-time charges for impairments and income tax valuation allowance expense, respectively, primarily driven by the extended low commodity price cycle for theTexas wholesale generation
Operational and Strategic Update
-
Allocating
$925 million of additional 2016 capital to incremental NRG-level debt reduction - GreenCo strategic process: Reintegrating NRG Renew into the NRG platform; expect resolution for NRG Home Solar and EVgo in the second quarter 2016
-
Asset sales completed or pending represent 877 MWs and
$138 million of$500 million 2016 asset sales target -
Reducing annual dividend to
$0.12 per share to enhance flexibility on capital allocation, reallocating approximately$145 million annually
2016 Financial Guidance
-
2016 Guidance is reaffirmed, and now includes GreenCo’s NRG Renew
-
Adjusted EBITDA of
$3,000-$3,200 million -
FCF before growth investments of
$1,000-$1,200 million
-
Adjusted EBITDA of
“Amid a continued weak commodity price environment, NRG’s integrated
competitive power platform once again delivered strong financial
results, demonstrating that we have the right portfolio and the right
platform to succeed,” said
NRG continued its strong track record of safety performance with a top quartile recordable rate of 0.71 for the full year 20154. Overall generation was down 3% from 2014, with coal and nuclear availability at 83.8% improving 2.4% over 2014.
Today, NRG also announces the reintegration of business renewables (formerly GreenCo’s NRG Renew) back into NRG. This move supports NRG’s advantaged position to participate in the changing landscape of the power industry and serve customers, especially with on- and offsite solar and distributed generation in the commercial and industrial space.
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Segment Results | |||||||||||
Table 1: Adjusted EBITDA | |||||||||||
($ in millions) |
Three Months Ended |
Twelve Months Ended |
|||||||||
Segment | 12/31/15 | 12/31/14 | 12/31/15 | 12/31/14 | |||||||
Business (a)(b) | $308 | $302 | $1,798 | $1,836 | |||||||
Home Retail | 144 | 165 | 739 | 604 | |||||||
Renew (a) | 22 | 31 | 171 | 172 | |||||||
NRG Yield (a) | 183 | 159 | 720 | 582 | |||||||
Corporate | (32) | 4 | (88) | (1) | |||||||
Adjusted EBITDA(c) | $625 | $661 | $3,340 | $3,193 |
a) | In accordance with GAAP, 2015 and 2014 results have been restated to include the full impact of the NRG Yield drop down transactions which closed on November 3, 2015, January 2, 2015 and June 30, 2014. | |
b) | See Appendices A-6 through A-9 for NRG Business regional details. | |
c) | See Appendices A-1 through A-4 for Operating Segment Reg G reconciliations; excludes negative Adjusted EBITDA from NRG Home Solar |
|
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Table 2: Net (Loss)/Income |
|||||||||||
($ in millions) |
Three Months Ended | Twelve Months Ended | |||||||||
Segment | 12/31/15 | 12/31/14 | 12/31/15 | 12/31/14 | |||||||
Business (a)(b) | $(4,664) | $577 | $(4,472) | $1,062 | |||||||
Home Retail | 140 | (119) | 652 | 137 | |||||||
Home Solar | (175) | (37) | (324) | (73) | |||||||
Renew (a) | (58) | (73) | (124) | (147) | |||||||
NRG Yield (a) | 13 | 4 | 55 | 99 | |||||||
Corporate(c) | (1,614) | (255) | (2,223) | (946) | |||||||
Net (Loss)/Income(b)(c)(d) | $(6,358) | $97 | $(6,436) | $132 |
a) | In accordance with GAAP, 2014 results have been restated to include full impact of the assets in the NRG Yield drop down transactions which closed on November 3, 2015, January 2, 2015 and June 30, 2014 | |
b) | Includes non-cash impairment charges of $4,823 million and $5,086 million for the three and twelve months ended December 31, 2015, respectively | |
c) | Includes non-cash income tax expense of $1,385 million and $1,342 million for the three and twelve months ended December 31, 2015, respectively | |
d) | Includes mark-to-market gains and losses of economic hedges |
NRG Business: Full year 2015 Adjusted EBITDA was
-
Gulf Coast Region:
$201 million increase due to higher average realized prices inTexas reflecting ERCOT hedge gains plus higher realized energy margins and capacity revenues in South Central offsetting lower coal generation across the region -
East Region:
$187 million lower due to declining energy margins from the absence of extreme weather which benefited first quarter 2014, lower capacity volumes following plant deactivations in PJM, partially offset by lower operating costs from reduced outages and decreased run times across the fleet, and the benefit of the full year impact of the coal assets acquired onApril 1, 2014 from Edison Mission Energy
Fourth quarter Adjusted EBITDA was
-
Gulf Coast Region:
$54 million increase due to higher average realized prices inTexas reflecting ERCOT hedge gains plus higher realized energy margins and capacity revenues in South Central, all offsetting lower coal and nuclear generation inTexas driven by outages and lower market prices -
East Region:
$45 million lower due to lower energy margins from milder weather, declines in gas prices and dark spreads, partially offset by increased contract margins attributable to new load contracts and lower supply costs, and lower operating costs from reduced outages, plant deactivations, and decreased run times across the fleet
NRG Home Retail: Full year 2015 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
NRG Renew: Full year 2015 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Asset Impairments and Valuation Allowance Tax Expense
NRG recorded total non-cash impairment charges of
The low commodity price environment and resulting impairments also lead
to
Dividend Reduction – Alignment
NRG’s Board of Directors has approved a reduction in the annual dividend
to
Liquidity and Capital Resources | ||||||
Table 3: Corporate Liquidity | ||||||
($ in millions) | 12/31/15 | 12/31/14 | ||||
Cash at NRG-Level | $693 | $661 | ||||
Revolver | 1,373 | 1,367 | ||||
NRG-Level Liquidity | $2,066 | $2,028 | ||||
Restricted cash | 414 | 457 | ||||
Cash at Non-Guarantor Subsidiaries | 825 | 1,455 | ||||
Total Liquidity | $3,305 | $3,940 |
NRG-level cash as of
NRG Strategic Developments
The Company has amended its partnership agreements with
This amendment does not impact the existing ROFO agreement.
NRG Business
NRG Business’s multi-year capital investment program includes both
generation additions and fuel conversions totaling approximately 4,659
MWs of generation capacity across the Company’s geographic footprint.
This enables the Company to bid generation assets in regional forward
capacity markets while also meeting key environmental compliance goals.
Assets that completed or are undergoing planned fuel conversions or
additions include Bowline 2 (COD second quarter 2015), Joliet Units 6-8
(expected COD second quarter 2016), New Castle Units 3-5 (expected COD
second quarter 2016), and Shawville 1-4 (expected COD third quarter
2016). In
In 2015, NRG completed a gas conversion at the Big Cajun II Unit 2,
enhanced environmental controls at
Construction of the 360 MW Cielo Lindo peaker facility (formerly P.H.
2016 Guidance
NRG is reaffirming its guidance range for 2016 with respect to both Adjusted EBITDA and FCF before growth investments. The Company’s 2016 guidance now includes GreenCo’s NRG Renew.
Table 4: 2016 Adjusted EBITDA and FCF before Growth Investments Guidance
|
2016 | |||
($ in millions) |
Guidance | |||
Adjusted EBITDA | $3,000 –$3,200 | |||
Interest payments(a) | (1,090) | |||
Income tax | (40) | |||
Working capital/other changes | 75 | |||
Adjusted Cash Flow from Operations | $1,945 –$2,145 | |||
Maintenance capital expenditures, net | (435)-(465) | |||
Environmental capital expenditures, net(b) | (285)-(315) | |||
Preferred dividends | (10) | |||
Distributions to non-controlling interests | (195)-(205) | |||
Free Cash Flow–before Growth Investments | $1,000 – $1,200 |
(a) | Reduced by $50 million versus prior guidance to reflect $691 million of debt retirement completed since third quarter 2015 earnings conference call | |||
(b) | Increase of $50 million versus prior guidance to reflect timing of spend between 2015 into 2016 | |||
Capital Allocation Update
Through
When combined with 2016 repurchases already completed and approximately
In 2015, NRG’s GenOn subsidiaries retired
On
The Company's common stock dividend, 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 leading a customer-driven change in the U.S. energy industry by
delivering cleaner and smarter energy choices, while building on the
strength of the nation’s largest and most diverse competitive power
portfolio. A Fortune 200 company, we create value through reliable and
efficient conventional generation while driving innovation in solar and
renewable power, electric vehicle ecosystems, carbon capture technology
and customer-centric energy solutions. 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 above include,
among others, general economic conditions, hazards customary in the
power industry, weather conditions, 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 regulation of markets and of environmental
emissions, 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 or successfully implement acquisitions and repowerings, our
ability to implement value enhancing improvements to plant operations
and companywide processes, our ability to obtain federal loan
guarantees, the inability to maintain or create successful partnering
relationships with
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
NRG ENERGY, INC. AND SUBSIDIARIES | |||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
For the Year Ended December 31, | |||||||||||||
(In millions, except per share amounts) |
2015 | 2014 | 2013 | ||||||||||
Operating Revenues | |||||||||||||
Total operating revenues | $ | 14,674 | $ | 15,868 | $ | 11,295 | |||||||
Cost of operations | 10,755 | 11,794 | 8,130 | ||||||||||
Depreciation and amortization | 1,566 | 1,523 | 1,256 | ||||||||||
Impairment losses | 5,030 | 97 | 459 | ||||||||||
Selling, general and administrative | 1,220 | 1,027 | 895 | ||||||||||
Acquisition-related transaction and integration costs | 10 | 84 | 128 | ||||||||||
Development activity expenses | 154 | 91 | 84 | ||||||||||
Total operating costs and expenses | 18,735 | 14,616 | 10,952 | ||||||||||
Gain on postretirement benefits curtailment and sale of assets | 21 | 19 | — | ||||||||||
Operating(Loss)/Income | (4,040 | ) | 1,271 | 343 | |||||||||
Other Income/(Expense) | |||||||||||||
Equity in earnings of unconsolidated affiliates | 36 | 38 | 7 | ||||||||||
Impairment losses on investments | (56 | ) | — | (99 | ) | ||||||||
Other income, net | 33 | 22 | 13 | ||||||||||
(Loss)/gain on sale of equity-method investment | (14 | ) | 18 | — | |||||||||
Net gain/(loss) on debt extinguishment | 75 | (95 | ) | (50 | ) | ||||||||
Interest expense | (1,128 | ) | (1,119 | ) | (848 | ) | |||||||
Total other expense | (1,054 | ) | (1,136 | ) | (977 | ) | |||||||
(Loss)/Income Before Income Taxes | (5,094 | ) | 135 | (634 | ) | ||||||||
Income tax expense/(benefit) | 1,342 | 3 | (282 | ) | |||||||||
Net (Loss)/Income | (6,436 | ) | 132 | (352 | ) | ||||||||
Less: Net (loss)/income attributable to noncontrolling interests and redeemable |
|||||||||||||
noncontrolling interests |
(54 | ) | (2 | ) | 34 | ||||||||
Net (Loss)/Income Attributable to NRG Energy, Inc. | (6,382 | ) | 134 | (386 | ) | ||||||||
Dividends for preferred shares | 20 | 56 | 9 | ||||||||||
(Loss)/Income Available for Common Stockholders | $ | (6,402 | ) | $ | 78 | $ | (395 | ) | |||||
(Loss)/Earnings Per Share Attributable to NRG Energy, Inc. Common Stockholders | |||||||||||||
Weighted average number of common shares outstanding — basic | 329 | 334 | 323 | ||||||||||
Net (Loss)/Income per Weighted Average Common Share — Basic | $ | (19.46 | ) | $ | 0.23 | $ | (1.22 | ) | |||||
Weighted average number of common shares outstanding — diluted | 329 | 339 | 323 | ||||||||||
Net (Loss)/Income per Weighted Average Common Share — Diluted | $ | (19.46 | ) | $ | 0.23 | $ | (1.22 | ) | |||||
Dividends Per Common Share | $ | 0.58 | $ | 0.54 | $ | 0.45 | |||||||
NRG ENERGY, INC. AND SUBSIDIARIES | |||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | |||||||||||||
|
For the Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | |||||||||||
(In millions) | |||||||||||||
Net (Loss)/Income | $ | (6,436 | ) | $ | 132 | $ | (352 | ) | |||||
Other Comprehensive (Loss)/Income, net of tax | |||||||||||||
Unrealized (loss)/gain on derivatives, net of income tax expense/(benefit) of $19, $(21), and $(6) | (15 | ) | (45 | ) | 8 | ||||||||
Foreign currency translation adjustments, net of income tax benefit of $0, $5, and $14 | (11 | ) | (8 | ) | (24 | ) | |||||||
Available-for-sale securities, net of income tax (benefit)/expense of $(3), $(2), and $2 | 17 | (7 | ) | 3 | |||||||||
Defined benefit plan, net of income tax expense/(benefit) of $69, $(88), and $100 | 10 | (129 | ) | 168 | |||||||||
Other comprehensive income/(loss) | 1 | (189 | ) | 155 | |||||||||
Comprehensive Loss | (6,435 | ) | (57 | ) | (197 | ) | |||||||
Less: Comprehensive (loss)/income attributable to noncontrolling interests and |
|||||||||||||
redeemable noncontrolling interests |
(73 | ) | 8 | 34 | |||||||||
Comprehensive Loss Attributable to NRG Energy, Inc. | (6,362 | ) | (65 | ) | (231 | ) | |||||||
Dividends for preferred shares | 20 | 56 | 9 | ||||||||||
Comprehensive Loss Available for Common Stockholders | $ | (6,382 | ) | $ | (121 | ) | $ | (240 | ) | ||||
NRG ENERGY, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
As of December 31, | |||||||||
2015 | 2014 | ||||||||
(In millions) | |||||||||
ASSETS | |||||||||
Current Assets | |||||||||
Cash and cash equivalents | $ | 1,518 | $ | 2,116 | |||||
Funds deposited by counterparties | 106 | 72 | |||||||
Restricted cash | 414 | 457 | |||||||
Accounts receivable — trade, less allowance for doubtful accounts of $21 and $23 | 1,157 | 1,322 | |||||||
Inventory | 1,252 | 1,247 | |||||||
Derivative instruments | 1,915 | 2,425 | |||||||
Cash collateral paid in support of energy risk management activities | 568 | 187 | |||||||
Renewable energy grant receivable | 13 | 135 | |||||||
Current assets held-for-sale | 6 | — | |||||||
Prepayments and other current assets | 442 | 447 | |||||||
Total current assets | 7,391 | 8,408 | |||||||
Property, Plant and Equipment | |||||||||
In service | 24,909 | 29,487 | |||||||
Under construction | 627 | 770 | |||||||
Total property, plant and equipment | 25,536 | 30,257 | |||||||
Less accumulated depreciation | (6,804 | ) | (7,890 | ) | |||||
Net property, plant and equipment | 18,732 | 22,367 | |||||||
Other Assets | |||||||||
Equity investments in affiliates | 1,045 | 771 | |||||||
Notes receivable, less current portion | 53 | 72 | |||||||
Goodwill | 999 | 2,574 | |||||||
Intangible assets, net of accumulated amortization of $1,525 and $1,402 | 2,310 | 2,567 | |||||||
Nuclear decommissioning trust fund | 561 | 585 | |||||||
Derivative instruments | 305 | 480 | |||||||
Deferred income taxes | 167 | 1,580 | |||||||
Non-current assets held-for-sale | 105 | 17 | |||||||
Other non-current assets | 1,214 | 1,045 | |||||||
Total other assets | 6,759 | 9,691 | |||||||
Total Assets | $ | 32,882 | $ | 40,466 | |||||
NRG ENERGY, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED BALANCE SHEETS (Continued) | |||||||||
|
As of December 31, | ||||||||
2015 | 2014 | ||||||||
(In millions, except share data) |
|||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current Liabilities | |||||||||
Current portion of long-term debt and capital leases | $ | 481 | $ | 474 | |||||
Accounts payable | 869 | 1,060 | |||||||
Derivative instruments | 1,721 | 2,054 | |||||||
Cash collateral received in support of energy risk management activities | 106 | 72 | |||||||
Accrued interest expense | 242 | 252 | |||||||
Other accrued expenses | 568 | 553 | |||||||
Current liabilities held-for-sale | 2 | — | |||||||
Other current liabilities | 386 | 394 | |||||||
Total current liabilities | 4,375 | 4,859 | |||||||
Other Liabilities | |||||||||
Long-term debt and capital leases | 18,983 | 19,701 | |||||||
Nuclear decommissioning reserve | 326 | 310 | |||||||
Nuclear decommissioning trust liability | 283 | 333 | |||||||
Postretirement and other benefit obligations | 588 | 727 | |||||||
Deferred income taxes | 19 | 21 | |||||||
Derivative instruments | 493 | 438 | |||||||
Out-of-market contracts, net of accumulated amortization of $664 and $562 | 1,146 | 1,244 | |||||||
Non-current liabilities held-for-sale | 4 | — | |||||||
Other non-current liabilities | 900 | 847 | |||||||
Total non-current liabilities | 22,742 | 23,621 | |||||||
Total Liabilities | 27,117 | 28,480 | |||||||
2.822% convertible perpetual preferred stock; $0.01 par value; 250,000 shares issued and outstanding | 302 | 291 | |||||||
Redeemable noncontrolling interest in subsidiaries | 29 | 19 | |||||||
Commitments and Contingencies | |||||||||
Stockholders' Equity | |||||||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 416,939,950 and |
|||||||||
415,506,176 shares issued; and 314,190,042 and 336,662,624 shares outstanding at |
|||||||||
December 31, 2015 and 2014 |
4 | 4 | |||||||
Additional paid-in capital | 8,296 | 8,327 | |||||||
Retained (deficit)/earnings | (3,007 | ) | 3,588 | ||||||
Less treasury stock, at cost; 102,749,908 and 78,843,552 shares at December 31, 2015 |
|||||||||
and 2014 |
(2,413 | ) | (1,983 | ) | |||||
Accumulated other comprehensive loss | (173 | ) | (174 | ) | |||||
Noncontrolling interest | 2,727 | 1,914 | |||||||
Total Stockholders' Equity | 5,434 | 11,676 | |||||||
Total Liabilities and Stockholders' Equity | $ | 32,882 | $ | 40,466 | |||||
NRG ENERGY, INC. AND SUBSIDIARIES | |||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
For the Year Ended December 31, |
|||||||||||||
2015 | 2014 | 2013 | |||||||||||
(In millions) | |||||||||||||
Cash Flows from Operating Activities | |||||||||||||
Net (loss)/income | $ | (6,436 | ) | $ | 132 | $ | (352 | ) | |||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | |||||||||||||
Distributions and equity in earnings of unconsolidated affiliates | 37 | 49 | 84 | ||||||||||
Depreciation and amortization | 1,566 | 1,523 | 1,256 | ||||||||||
Provision for bad debts | 64 | 64 | 67 | ||||||||||
Amortization of nuclear fuel | 45 | 46 | 36 | ||||||||||
Amortization of financing costs and debt discount/premiums | (11 | ) | (12 | ) | (33 | ) | |||||||
Adjustment to (gain)/loss on debt extinguishment | (75 | ) | 25 | (15 | ) | ||||||||
Amortization of intangibles and out-of-market contracts | 81 | 64 | 49 | ||||||||||
Amortization of unearned equity compensation | 41 | 42 | 38 | ||||||||||
Gain on post retirement benefits curtailment and sales of assets | (7 | ) | (4 | ) | (3 | ) | |||||||
Impairment losses | 5,086 | 97 | 558 | ||||||||||
Changes in derivative instruments | 233 | (61 | ) | 164 | |||||||||
Changes in deferred income taxes and liability for uncertain tax benefits | 1,326 | (154 | ) | (67 | ) | ||||||||
Changes in collateral deposits in support of risk management activities | (381 | ) | 146 | (47 | ) | ||||||||
Changes in nuclear decommissioning trust liability | (2 | ) | 19 | 15 | |||||||||
Cash provided/(used) by changes in other working capital, net of acquisition and disposition effects: | |||||||||||||
Accounts receivable - trade | 136 | (2 | ) | (224 | ) | ||||||||
Inventory | (26 | ) | (245 | ) | 11 | ||||||||
Prepayments and other current assets | 8 | 36 | 25 | ||||||||||
Accounts payable | (218 | ) | (12 | ) | 275 | ||||||||
Accrued expenses and other current liabilities | (9 | ) | (26 | ) | (114 | ) | |||||||
Other assets and liabilities | (149 | ) | (217 | ) | (453 | ) | |||||||
Net Cash Provided by Operating Activities | 1,309 | 1,510 | 1,270 | ||||||||||
Cash Flows from Investing Activities | |||||||||||||
Acquisition of businesses, net of cash acquired | (31 | ) | (2,936 | ) | (494 | ) | |||||||
Capital expenditures | (1,283 | ) | (909 | ) | (1,987 | ) | |||||||
Decrease/(increase) in restricted cash, net | 8 | 57 | (22 | ) | |||||||||
Decrease/(increase) in restricted cash to support equity requirements for U.S. DOE funded projects | 35 | (206 | ) | (26 | ) | ||||||||
Decrease/(increase) in notes receivable | 18 | 25 | (11 | ) | |||||||||
Proceeds from renewable energy grants | 82 | 916 | 55 | ||||||||||
Purchases of emission allowances, net of proceeds | 41 | (16 | ) | 5 | |||||||||
Investments in nuclear decommissioning trust fund securities | (629 | ) | (619 | ) | (514 | ) | |||||||
Proceeds from sales of nuclear decommissioning trust fund securities | 631 | 600 | 488 | ||||||||||
Proceeds from sale of assets, net | 27 | 203 | 13 | ||||||||||
Investments in unconsolidated affiliates | (395 | ) | (103 | ) | — | ||||||||
Other | 11 | 85 | (35 | ) | |||||||||
Net Cash Used by Investing Activities | (1,485 | ) | (2,903 | ) | (2,528 | ) | |||||||
Cash Flows from Financing Activities | |||||||||||||
Payment of dividends to preferred and common stockholders | (201 | ) | (196 | ) | (154 | ) | |||||||
Net receipts from settlement of acquired derivatives that include financing elements | 196 | 9 | 267 | ||||||||||
Payment for treasury stock | (437 | ) | (39 | ) | (25 | ) | |||||||
Sales proceeds and other contributions from noncontrolling interests in subsidiaries | 647 | 819 | 531 | ||||||||||
Proceeds from issuance of common stock | 1 | 21 | 16 | ||||||||||
Proceeds from issuance of long-term debt | 1,004 | 4,563 | 1,777 | ||||||||||
Payment of debt issuance and hedging costs | (21 | ) | (67 | ) | (50 | ) | |||||||
Payments for short and long-term debt | (1,599 | ) | (3,827 | ) | (935 | ) | |||||||
Other | (22 | ) | (18 | ) | — | ||||||||
Net Cash (Used)/Provided by Financing Activities | (432 | ) | 1,265 | 1,427 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 10 | (10 | ) | (2 | ) | ||||||||
Net (Decrease)/Increase in Cash and Cash Equivalents | (598 | ) | (138 | ) | 167 | ||||||||
Cash and Cash Equivalents at Beginning of Period | 2,116 | 2,254 | 2,087 | ||||||||||
Cash and Cash Equivalents at End of Period | $ | 1,518 | $ | 2,116 | $ | 2,254 | |||||||
Appendix Table A-1: Fourth Quarter 2015 Adjusted EBITDA
Reconciliation by Operating Segment
The following table
summarizes the calculation of Adjusted EBITDA and provides a
reconciliation to net income/(loss)
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net income/(loss) | 140 | (175) | (4,664) | (58) | 13 | (1,614) | (6,358) | ||||||||
Plus: | |||||||||||||||
Interest expense, net | - | 1 | 17 | 25 | 56 | 171 | 270 | ||||||||
Loss on debt extinguishment | - | - | - | - | - | (84) | (84) | ||||||||
Income tax | - | - | - | (5) | 4 | 1,386 | 1,385 | ||||||||
Depreciation, amortization and ARO expense | 29 | 7 | 232 | 55 | 67 | 10 | 400 | ||||||||
Amortization of contracts | 1 | - | (16) | (1) | 14 | - | (2) | ||||||||
EBITDA | 170 | (167) | (4,431) | 16 | 154 | (131) | (4,389) | ||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | - | - | 4 | (29) | 23 | 43 | 41 | ||||||||
Integration & transaction costs | 1 | (8) | 11 | - | 1 | 2 | 7 | ||||||||
Deactivation costs | - | - | 3 | - | - | - | 3 | ||||||||
Asset write-offs and impairments | - | 132 | 4,613 | 32 | 2 | 54 | 4,833 | ||||||||
NRG Home Solar EBITDA | - | 43 | - | - | - | - | 43 | ||||||||
Market to market (MtM) (gains)/losses on economic hedges | (27) | - | 108 | 3 | 3 | - | 87 | ||||||||
Adjusted EBITDA | 144 | - | 308 | 22 | 183 | (32) | 625 | ||||||||
Appendix Table A-2: Fourth Quarter 2014 Adjusted EBITDA
Reconciliation by Operating Segment
The following table
summarizes the calculation of Adjusted EBITDA and provides a
reconciliation to net (loss)/income
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net (loss)/income | (119) | (37) | 577 | (73) | 4 | (255) | 97 | ||||||||
Plus: | |||||||||||||||
Interest expense, net | - | - | 16 | 35 | 77 | 178 | 306 | ||||||||
Income tax | 1 | - | - | - | (11) | 81 | 71 | ||||||||
Depreciation amortization and ARO expense | 29 | 3 | 269 | 59 | 65 | 10 | 435 | ||||||||
Amortization of contracts | 1 | - | (13) | 1 | 8 | - | (3) | ||||||||
EBITDA | (88) | (34) | 849 | 22 | 143 | 14 | 906 | ||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | - | - | 4 | 17 | 16 | (17) | 20 | ||||||||
Integration & transaction costs, gain on sale | 3 | - | (21) | (4) | 2 | 17 | (3) | ||||||||
Deactivation costs | - | - | 27 | - | - | - | 27 | ||||||||
Asset write-offs and impairments | - | - | 11 | - | - | (9) | 2 | ||||||||
Legal settlements | 1 | - | - | - | - | - | 1 | ||||||||
NRG Home Solar EBITDA | - | 34 | - | - | - | - | 34 | ||||||||
MtM losses/(gains) on economic hedges | 249 | - | (568) | (4) | (2) | (1) | (326) | ||||||||
Adjusted EBITDA | 165 | - | 302 | 31 | 159 | 4 | 661 | ||||||||
Appendix Table A-3: Full Year 2015 Adjusted EBITDA Reconciliation by
Operating Segment
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss)
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net income/(loss) | 652 | (324) | (4,472) | (124) | 55 | (2,223) | (6,436) | ||||||||
Plus: | |||||||||||||||
Interest expense, net | - | 3 | 69 | 104 | 238 | 702 | 1,116 | ||||||||
Loss on debt extinguishment | - | - | - | - | 9 | (84) | (75) | ||||||||
Income tax | - | - | 1 | (18) | 12 | 1,347 | 1,342 | ||||||||
Depreciation, amortization and ARO expense | 123 | 24 | 939 | 213 | 267 | 34 | 1,600 | ||||||||
Amortization of contracts | 1 | - | (57) | 1 | 54 | 1 | - | ||||||||
EBITDA | 776 | (297) | (3,520) | 176 | 635 | (223) | (2,453) | ||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | - | - | 14 | (47) | 77 | 65 | 109 | ||||||||
Integration & transaction costs and other non recurring costs | (12) | (8) | 11 | (3) | 3 | 15 | 6 | ||||||||
Deactivation costs | - | - | 11 | - | - | - | 11 | ||||||||
Asset write-offs and impairments | 36 | 132 | 4,854 | 42 | 3 | 55 | 5,122 | ||||||||
NRG Home Solar EBITDA | - | 173 | - | - | - | - | 173 | ||||||||
Market to market (MtM) (gains)/losses on economic hedges | (61) | - | 428 | 3 | 2 | - | 372 | ||||||||
Adjusted EBITDA |
739 | - | 1,798 | 171 | 720 | (88) | 3,340 | ||||||||
Appendix Table A-4: Full Year 2014 Adjusted EBITDA Reconciliation by
Operating Segment
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss)
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net income/(loss) | 137 | (73) | 1,062 | (147) | 99 | (946) | 132 | ||||||||
Plus: | |||||||||||||||
Interest expense, net | 1 | 1 | 65 | 119 | 189 | 729 | 1,104 | ||||||||
Loss on debt extinguishment | - | - | - | 1 | - | 94 | 95 | ||||||||
Income tax | 1 | - | - | - | 4 | (2) | 3 | ||||||||
Depreciation amortization and ARO expense | 121 | 7 | 986 | 196 | 204 | 32 | 1,546 | ||||||||
Amortization of contracts | (2) | - | (32) | 1 | 29 | - | (4) | ||||||||
EBITDA | 258 | (65) | 2,081 | 170 | 525 | (93) | 2,876 | ||||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | - | - | 8 | (2) | 55 | 11 | 72 | ||||||||
Integration & transaction costs, gain on sale | 4 | - | (37) | (4) | 4 | 82 | 49 | ||||||||
Deactivation costs | - | - | 42 | - | - | - | 42 | ||||||||
Asset write-offs and impairments | - | - | 85 | 12 | - | - | 97 | ||||||||
Legal settlement | 5 | - | - | - | - | - | 5 | ||||||||
NRG Home Solar EBITDA | - | 65 | - | - | - | - | 65 | ||||||||
MtM losses/(gains) on economic hedges | 337 | - | (343) | (4) | (2) | (1) | (13) | ||||||||
Adjusted EBITDA | 604 | - | 1,836 | 172 | 582 | (1) | 3,193 | ||||||||
Appendix Table A-5: Full Year 2015 and Full Year 2014 Adjusted Cash
Flow from Operations Reconciliations
The following table
summarizes the calculation of adjusted cash flow operating activities
providing a reconciliation to net cash provided by operating activities
Twelve months ended | Twelve months ended | |||||
($ in millions) | December 31, 2015 | December 31, 2014 | ||||
Net Cash Provided by Operating Activities | $1,309 | $1,510 | ||||
Reclassifying of net receipts (payments) for settlement of |
||||||
acquired derivatives that include financing elements |
196 | 9 | ||||
Merger and integration expenses | 21 | 95 | ||||
Return of capital from equity investments | 38 | - | ||||
Adjustment for change in collateral | 381 | (89) | ||||
Adjusted Cash Flow from Operating Activities | $1,945 | $1,525 | ||||
Maintenance CapEx, net* |
(413) | (254) | ||||
Environmental CapEx, net | (237) | (254) | ||||
Preferred dividends | (10) | (9) | ||||
Distributions to non-controlling interests | (158) | (57) | ||||
Free Cash Flow – before Growth investments | $1,127 | 951 |
*Excludes merger and integration CapEx of $15 million in 2015 and $27 million in 2014 |
||
Appendix Table A-6: Fourth Quarter 2015 Regional Adjusted EBITDA
Reconciliation for NRG Business
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
(loss)/income
Gulf | |||||||||||||
($ in millions) | East | Coast | West | B2B | Carbon 360 | Total | |||||||
Net (loss)/income | (170) | (4,495) | (19) | 22 | (2) | (4,664) | |||||||
Plus: | |||||||||||||
Interest expense, net | 16 | - | 1 | - | - | 17 | |||||||
Depreciation, amortization and ARO expense | 94 | 120 | 13 | 5 | - | 232 | |||||||
Amortization of contracts | (19) | (1) | 3 | 1 | - | (16) | |||||||
EBITDA | (79) | (4,376) | (2) | 28 | (2) | (4,431) | |||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | - | 3 | (1) | 1 | 1 | 4 | |||||||
Non recurring costs | 11 | - | - | - | - | 11 | |||||||
Deactivation costs | 3 | - | - | - | - | 3 | |||||||
Asset write-offs and impairments | 224 | 4,380 | 9 | - | - | 4,613 | |||||||
Market to market (MtM) losses/(gains) on economic hedges | 23 | 103 | 3 | (21) | - | 108 | |||||||
Adjusted EBITDA | 182 | 110 | 9 | 8 | (1) | 308 | |||||||
Appendix Table A-7: Fourth Quarter 2014 Regional Adjusted EBITDA
Reconciliation for NRG Business
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss)
($ in millions) | East | Gulf Coast | West | B2B | Carbon 360 | Total | |||||||
Net income/(loss) | 467 | 290 | (26) | (151) | (3) | 577 | |||||||
Plus: | |||||||||||||
Interest expense, net | 16 | - | - | - | - | 16 | |||||||
Depreciation amortization and ARO expense | 92 | 151 | 23 | 3 | - | 269 | |||||||
Amortization of contracts | (16) | 5 | (3) | 1 | - | (13) | |||||||
EBITDA | 559 | 446 | (6) | (147) | (3) | 849 | |||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | 17 | - | (13) | (1) | 1 | 4 | |||||||
Integration & transaction costs, gain on sale | 1 | (22) | - | - | - | (21) | |||||||
Deactivation costs | 4 | - | 23 | - | - | 27 | |||||||
Asset write-offs and impairments | 5 | 3 | 3 | - | - | 11 | |||||||
MtM (gains)/losses on economic hedges | (359) | (371) | 6 | 156 | - | (568) | |||||||
Adjusted EBITDA | 227 | 56 | 13 | 8 | (2) | 302 | |||||||
Appendix Table A-8: Full Year 2015 Regional Adjusted EBITDA
Reconciliation for NRG Business
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
(loss)/income
Gulf | |||||||||||||
($ in millions) | East | Coast | West | B2B | Carbon 360 | Total | |||||||
Net (loss)/income | (1) | (4,448) | 11 | (21) | (13) | (4,472) | |||||||
Plus: | |||||||||||||
Interest expense, net | 68 | - | 1 | - | - | 69 | |||||||
Income tax expense | - | - | - | 1 | - | 1 | |||||||
Depreciation, amortization and ARO expense | 314 | 551 | 62 | 12 | - | 939 | |||||||
Amortization of contracts | (68) | 2 | 3 | 6 | - | (57) | |||||||
EBITDA | 313 | (3,895) | 77 | (2) | (13) | (3,520) | |||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | - | 3 | 6 | 1 | 4 | 14 | |||||||
Non recurring costs | 11 | - | - | - | - | 11 | |||||||
Deactivation costs | 9 | - | 2 | - | - | 11 | |||||||
Asset write-offs and impairments | 448 | 4,397 | 9 | - | - | 4,854 | |||||||
Market to market (MtM) losses on economic hedges | 276 | 83 | 8 | 61 | - | 428 | |||||||
Adjusted EBITDA | 1,057 | 588 | 102 | 60 | (9) | 1,798 | |||||||
Appendix Table A-9: Full Year 2014 Regional Adjusted EBITDA
Reconciliation for NRG Business
The following table summarizes
the calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss)
($ in millions) | East | Gulf Coast | West | B2B | Carbon 360 | Total | |||||||
Net income/(loss) | 916 | 223 | 89 | (156) | (10) | 1,062 | |||||||
Plus: | |||||||||||||
Interest expense, net | 64 | (1) | 1 | 1 | - | 65 | |||||||
Depreciation amortization and ARO expense | 303 | 592 | 77 | 13 | 1 | 986 | |||||||
Amortization of contracts | (50) | 21 | (9) | 6 | - | (32) | |||||||
EBITDA | 1,233 | 835 | 158 | (136) | (9) | 2,081 | |||||||
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates | 26 | 1 | (28) | 2 | 7 | 8 | |||||||
Integration & transaction costs, gain on sale | 8 | (45) | - | - | - | (37) | |||||||
Deactivation costs | 14 | - | 28 | - | - | 42 | |||||||
Asset write-offs and impairments | 6 | 76 | 3 | - | - | 85 | |||||||
MtM (gains)/losses on economic hedges | (43) | (480) | 10 | 170 | - | (343) | |||||||
Adjusted EBITDA | 1,244 | 387 | 171 | 36 | (2) | 1,836 | |||||||
Appendix Table A-10: Full Year 2015 Sources and Uses of Liquidity
The
following table summarizes the sources and uses of liquidity for full
year 2015
Twelve months ended | |||
($ in millions) | December 31, 2015 | ||
Sources: | |||
Adjusted Cash Flow from Operations | $1,945 | ||
Equity Proceeds, NRG Yield, net of fees | 599 | ||
Debt Proceeds, NRG Yield Revolver | 551 | ||
Debt Proceeds, NRG Yield Convertible Notes, net of fees | 288 | ||
Tax Equity Financing, net of fees | 119 | ||
Other investing and financing activities | 76 | ||
Debt proceeds, other project debt financing | 15 | ||
Uses: | |||
Debt Repayments | 1,195 | ||
Maintenance and Environmental Capex, net | 650 | ||
Growth Investments and Acquisitions, net | 457 | ||
Share Repurchases | 437 | ||
Debt Repayments, non-discretionary | 405 | ||
Collateral Postings | 381 | ||
NYLD Investment in Desert Sunlight | 311 | ||
Common and Preferred Stock Dividends | 200 | ||
Distributions to Non-Controlling Entities | 158 | ||
Merger and Integration-related payments | 34 | ||
Change in Total Liquidity | $(635) | ||
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. Adjusted EBITDA represents EBITDA adjusted for mark-to-market gains or losses, asset write offs and impairments; and factors which we do not consider indicative of future operating performance. 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.
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 and integration related 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 and integration related 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 investments) is adjusted cash flow from operations less maintenance and environmental capital expenditures, net of funding, and preferred stock dividends 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 investments as a measure of cash available for discretionary expenditures.
1 Excludes negative contribution from NRG Home Solar of
2 Represents total discretionary debt retirements from
3 Total impairments of
4 Excludes Goal Zero, NRG Home Services and NRG Home Solar
5 See Appendix A-10 for the Full Year 2015 Sources and Uses of Liquidity detail.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160229005864/en/
Source:
NRG Energy, Inc.
Media:
Karen Cleeve, 609-524-4608
or
Marijke
Shugrue, 609-524-5262
or
Investors:
Kevin Cole,
609-524-4526
CFA
or
Lindsey Puchyr, 609-524-4527