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NRG Energy, Inc. Reports Second Quarter Results; Modifies Guidance and Announces Successful IPO of NRG Yield (NYLD)
Financial Highlights
-
$594 million of Adjusted EBITDA in the second quarter, including$140 million delivered by NRG’s retail businesses; -
$462 million of net proceeds from successful initial public offering ofNRG Yield ; -
Increased and repriced Term Loan B and Revolver, redeemed GenOn’s
$575 million 2014 Senior Notes, and extended Revolver maturity by two years
Business and Operational Highlights
-
Increased projected operational and cost synergy benefits arising from
the GenOn transaction to
$340 million in Adjusted EBITDA per year by 2014 and increased projected Free Cash Flow before Growth benefits to$482 million , also by 2014; -
Achieved full and on time commercial operations of the 550 MW El
Segundo project on
August 1, 2013 and the 720 MW Marsh Landing project during the second quarter, which together will contribute over$200 million in annual Adjusted EBITDA in 2014; -
Closed the acquisition of the 390 MW, 160 MWt Gregory cogeneration
plant in
Texas onAugust 7, 2013 ; - Achieved commercial operations of the 75 MW natural gas peaking unit at WA Parish; completed 62 MW coal to gas conversion at Dover;
- Acquired two completed solar projects, Kansas South and TA-High Desert, totaling 40 MW;
-
Acquired a 26 MW contracted solar project in advanced development on
Guam ; -
Announced the planned installation of solar arrays at the
Mandalay Bay Resort Convention Center inLas Vegas ; - Grew net retail customer count by 23,000 during the quarter
2013 and 2014 Guidance
-
Modified 2013 Guidance as follows:
-
Adjusted EBITDA from
$2,615-$2,815 million to$2,550-$2,700 million -
FCF before growth investments from
$1,050-$1,250 million to$1,050-$1,200 million
-
Adjusted EBITDA from
-
Reaffirmed 2014 Guidance as follows:
-
Adjusted EBITDA of
$2,850-$3,050 million ; -
FCF before growth investments of
$1,100-$1,300 million .
-
Adjusted EBITDA of
“While our current results have been impacted by a continuation of
extraordinarily mild weather into the critical summer air conditioning
season, particularly in
Segment Results
Table 1: Adjusted EBITDA |
|||||||||||||
($ in millions) | Three Months Ended | Six Months Ended | |||||||||||
Segment | 6/30/13 | 6/30/12(2) | 6/30/13 | 6/30/12(2) | |||||||||
Retail | 140 | 219 | 243 | 331 | |||||||||
Wholesale | |||||||||||||
Gulf Coast | |||||||||||||
- Texas |
117 | 228 | 189 | 367 | |||||||||
- South Central |
18 | 28 | 9 | 52 | |||||||||
East | 163 | 17 | 321 | 17 | |||||||||
West | 50 | 23 | 54 | 38 | |||||||||
Other | 3 | 14 | 11 | 27 | |||||||||
NRG Yield | 61 | 25 | 95 | 50 | |||||||||
Alternative Energy | 23 | 10 | 34 | 8 | |||||||||
Corporate | 19 | (9) | 11 | (19) | |||||||||
Adjusted EBITDA(1) | 594 | 555 | 967 | 871 | |||||||||
(1) Detailed adjustments by region are shown in Appendix A (2) Revised to reflect new EBITDA methodology |
Table 2: Net Income/(Loss) |
|||||||||||||
($ in millions) | Three Months Ended | Six Months Ended | |||||||||||
Segment | 6/30/13 | 6/30/12 | 6/30/13 | 6/30/12 | |||||||||
Retail | (82) | 797 | 287 | 804 | |||||||||
Wholesale | |||||||||||||
Gulf Coast | |||||||||||||
- Texas |
169 | (427) | (257) | (501) | |||||||||
- South Central |
6 | 11 | (1) | (19) | |||||||||
East |
142 | (13) | (17) | (61) | |||||||||
West | 37 | 21 | 30 | 7 | |||||||||
Other | (3) | 7 | - | 13 | |||||||||
NRG Yield | 33 | (1) | 40 | 4 | |||||||||
Alternative Energy | (29) | (14) | (55) | (29) | |||||||||
Corporate | (143) | (130) | (225) | (174) | |||||||||
Net Income/(Loss) | 130 | 251 | (198) | 44 | |||||||||
Retail: Second quarter Adjusted EBITDA was
East: Second quarter Adjusted EBITDA was
West: Second quarter Adjusted EBITDA was
Alternative Energy: Second quarter Adjusted EBITDA was
Liquidity and Capital Resources
Table 3: Corporate Liquidity |
||||||||||
($ in millions) | 6/30/13 | 3/31/13 | 12/31/12 | |||||||
Cash and Cash Equivalents | 1,368 | 1,707 | 2,087 | |||||||
Restricted cash | 267 | 221 | 217 | |||||||
Total | 1,635 | 1,928 | 2,304 | |||||||
Total Credit Facility Availability | 1,181 | 1,157 | 1,058 | |||||||
Total Liquidity | 2,816 | 3,085 | 3,362 | |||||||
Total current liquidity, as of
-
$1,050 million of cash outflows, through the first half of 2013, consisting of the following items:-
$394 million net financing activities consisting of:$775 million to repurchase senior notes along with$28 million refinancing fees,$41 million scheduled debt amortization; partially offset by$450 million increase in Term Loan B proceeds; -
$203 million of maintenance and environmental capital expenditures, net; -
$158 million of collateral deposits; -
$90 million of merger related payments; -
$73 million of dividends to common and preferred shareholders; -
$72 million of solar and conventional growth investments, net of debt proceeds, third party funding and cash grant proceeds; -
$25 million of share repurchases; and -
$35 million of other investing and financing activities
-
-
Offset, in part, by
$331 million of adjusted cash flow from operations
Growth Initiatives and Strategic Developments
NRG continued to enhance its competitiveness and strategic positioning through a wide range of growth initiatives, including:
IPO of
On
Solar
-
Agua Caliente – As of
June 30, 2013 , 278 MW of generation capacity had achieved commercial operations making Agua Caliente the largest operating solar PV project inthe United States . Overall, construction at Agua Caliente is several months ahead of schedule and is currently expected to reach full completion in early 2014 (290 MW). Power generated by Agua Caliente is being sold under a 25-year power purchase agreement (PPA) toPacific Gas and Electric Co (PG&E ). NRG owns a 51% interest in the project. -
CVSR – Construction of the
California Valley Solar Ranch project is ahead of schedule with 127 MW having achieved commercial operations byJune 30, 2013 , with the remaining 123 MW expected to come on line by the fourth quarter of 2013. Power from this project is being sold toPG&E under 25-year PPAs. -
Ivanpah – All units (378 MW) are currently expected to be
completed in the fourth quarter of 2013. Power from Units 1 and 3 will
be sold to
PG&E via two 25-year PPAs, and power from Unit 2 will be sold to Southern California Edison (SCE) under a 20-year PPA. -
Other Solar –
-
In
June 2013 , the Company reached commercial operations for two solar projects totaling 40 MW acquired fromRecurrent Energy , Kansas South and TA-High Desert. The solar facilities provide electricity to SCE andPG&E under 20-year PPAs. -
In
July 2013 , the Company reached agreement to acquire a 26 MW solar project on the island ofGuam fromQuantum Guam Power Holdings, LLC , a wholly-owned affiliate ofQuantum Utility Generation, LLC . NRG Solar will construct, own and operate the solar project which will sell all of its power output to theGuam Power Authority , the island’s sole electric utility, under two 25-year PPAs. -
In
July 2013 , the Company announced the planned installation of one of the largest contiguous rooftop solar photovoltaic arrays in the world at theMandalay Bay Resort Convention Center inLas Vegas . The 6 MW installation will be MGM Resorts’ first commercial solar project inthe United States and will generate enough electricity to power the equivalent of 1,000 homes.
-
In
Conventional
-
Gregory – On
August 7, 2013 , the Company closed on the acquisition of the 390 MW, 160 MWt Gregory cogeneration plant inCorpus Christi, Texas , for$244 million (after working capital adjustments), expanding its growing cogeneration fleet as it provides NRG with additional cost-effective baseload power in ERCOT. This acquisition will be funded by$120 million of Term Loan proceeds and NRG equity.
-
Marsh Landing – On
May 1, 2013 , the Company achieved commercial operations and commenced delivery of the PPA for its Marsh Landing project, a 720 MW natural gas-fired peaking facility adjacent to the Company'sContra Costa generating facility nearAntioch, California . The facility is contracted withPG&E under a 10-year PPA. -
El Segundo – OnAugust 1, 2013 , the Company achieved commercial operations and commenced delivery of the PPA for itsEl Segundo Power Generating Station , a 550 MW fast start, gas turbine combined cycle generating facility inEl Segundo, California . The facility was constructed pursuant to a 10-year, 550 MW PPA withSouthern California Edison. -
WA Parish Peaking Unit – On
June 29, 2013 , the Company achieved commercial operation of its 75 MW natural gas peaking unit at Parish.
Outlook for 2013 and 2014
NRG has revised downward and narrowed the range of its Adjusted EBITDA
and FCF before growth investments guidance for 2013. This reduction
primarily arises out of the volumetric sales shortfall caused by the
unseasonably mild summer weather in
The Company’s guidance for fiscal year 2014 remains the same with respect to both Adjusted EBITDA and FCF before growth investments and assumes, in each case, normalized weather through 2014.
Table 4: 2013 and 2014 Adjusted EBITDA and FCF before growth investments Guidance |
|||||||||||||
|
8/9/2013 |
6/24/2013 |
|||||||||||
(dollars in millions) | 2013 | 2014 | 2013 | 2014 | |||||||||
Adjusted EBITDA | 2,550 – 2,700 | 2,850 – 3,050 | 2,615 – 2,815 | 2,850 – 3,050 | |||||||||
Interest payments | (945) | (945) | (945) | (945) | |||||||||
Income tax | 50 | (40) | 50 | (40) | |||||||||
Working capital/other changes | (120) | (165) | (120) | (215) | |||||||||
Adjusted Cash flow from operations | 1,535 – 1,685 | 1,700 – 1,900 | 1,600 – 1,800 | 1,650 – 1,850 | |||||||||
Maintenance capital expenditures, net | (325)-(345) | (315)-(335) | (385)-(405) | (325)-(345) | |||||||||
Environmental capital expenditures, net | (135)-(145) | (220)-(240) | (155)-(175) | (205)-(225) | |||||||||
Preferred dividends | (9) | (9) | (9) | (9) | |||||||||
Distributions to non-controlling interests- |
|||||||||||||
NRG Yield and Solar |
(7) | (33) | (1) | (6) | |||||||||
Free cash flow – before growth investments |
1,050 – 1,200 | 1,100 – 1,300 | 1,050 – 1,250 | 1,100 – 1,300 | |||||||||
Notes - subtotals and totals are rounded |
|||||||||||||
2013 Capital Allocation Program
The IPO of
During the second quarter of 2013, NRG exceeded the previously announced
During the first six months of 2013, the Company purchased 972,292
shares of NRG common stock for
On
The Company's common stock dividend 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 at the forefront of changing how people think about and use
energy. We deliver cleaner and smarter energy choices for our customers,
backed by the nation’s largest independent power generation portfolio of
fossil fuel, nuclear, solar and wind facilities. A Fortune 500 company,
NRG is challenging the U.S. energy industry by becoming one of the
largest developers of solar power, building the first comprehensive
electric vehicle ecosystem, and providing customers with the most
advanced smart energy solutions to better manage their energy use. In
addition to 46,000 megawatts of generation capacity, enough to supply
nearly 40 million homes, our retail electricity providers – Reliant,
Safe Harbor Disclosure
This news release 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 anticipated benefits of the merger between NRG and GenOn, 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 have been 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, 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. The Adjusted EBITDA guidance and free cash flows are
estimates as of today’s date,
NRG ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||||
Three Months ending June 30, |
Six Months ending June 30, |
|||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(In millions, except for per share amounts) |
||||||||||||
Operating Revenues | ||||||||||||
Total operating revenues | $ 2,929 | $ 2,166 |
$ 5,010 |
$ 4,028 | ||||||||
Operating Costs and Expenses | ||||||||||||
Cost of operations | 2,059 | 1,337 | 3,824 | 2,920 | ||||||||
Depreciation and amortization | 305 | 234 | 603 | 464 | ||||||||
Selling, general and administrative | 213 | 183 | 442 | 389 | ||||||||
Acquisition-related transaction and integration costs | 37 | — | 69 | — | ||||||||
Development activity expenses | 20 | 15 | 36 | 28 | ||||||||
Total operating costs and expenses | 2,634 | 1,769 | 4,974 | 3,801 | ||||||||
Operating Income | 295 | 397 | 36 | 227 | ||||||||
Other Income/(Expense) | ||||||||||||
Equity in earnings of unconsolidated affiliates | 8 | 14 | 11 | 22 | ||||||||
Other income, net | — | 2 | 4 | 3 | ||||||||
Loss on debt extinguishment | (21) | — | (49) | — | ||||||||
Interest expense | (206) | (167) | (402) | (332) | ||||||||
Total other expense | (219) | (151) | (436) | (307) | ||||||||
Income/(Loss) Before Income Taxes | 76 | 246 | (400) | (80) | ||||||||
Income tax benefit | (61) | (13) | (210) | (133) | ||||||||
Net Income/(Loss) | 137 | 259 | (190) | 53 | ||||||||
Less: Net income attributable to noncontrolling interest | 7 | 8 | 8 | 9 | ||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. | 130 | 251 | (198) | 44 | ||||||||
Dividends for preferred shares | 3 | 3 | 5 | 5 | ||||||||
Income/(Loss) Available for Common Stockholders | $ 127 | $ 248 | $ (203) |
$ 39 |
||||||||
Earnings/(Loss) Per Share Attributable to NRG Energy, Inc. Common Stockholders | ||||||||||||
Weighted average number of common shares outstanding — basic | 323 | 228 | 323 | 228 | ||||||||
Earnings/(Loss) per weighted average common share — basic | $ 0.39 | $ 1.09 | $ (0.63) | $ 0.17 | ||||||||
Weighted average number of common shares outstanding — diluted | 327 | 229 | 323 | 229 | ||||||||
Earnings/(Loss) per weighted average common share — diluted |
$ 0.39 |
$ 1.08 |
$ (0.63) |
$ 0.17 |
||||||||
Dividends Per Common Share | $ 0.12 | $ — | $ 0.21 | $ — | ||||||||
NRG ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS) (Unaudited) |
||||||||||
Three Months ending June 30, |
Six Months ending June 30, |
|||||||||
2013 | 2012 | 2013 | 2012 | |||||||
Net Income/(Loss) | $ 137 | $ 259 | $ (190) | $ 53 | ||||||
Other Comprehensive Income/(Loss), net of tax | ||||||||||
Unrealized gain/(loss) on derivatives, net of income tax (expense)/ benefit of $(12), $47, $(3) and $52 | 17 | (80) | 24 | (89) | ||||||
Foreign currency translation adjustments, net of income tax benefit of $12, $5, $12 and $2 | (19) | (8) | (19) | (2) | ||||||
Available-for-sale securities, net of income tax benefit/(expense) of $2, $0, $(1) and $0 | — | — | 2 | — | ||||||
Defined benefit plans, net of tax expense of $9, $0, $4 and $0 | 20 | — | 25 | — | ||||||
Other comprehensive income/(loss) | 18 | (88) | 32 | (91) | ||||||
Comprehensive Income/(Loss) | 155 | 171 | (158) | (38) | ||||||
Less: Comprehensive income attributable to noncontrolling interest | 7 | 8 | 8 | 9 | ||||||
Comprehensive Income/(Loss) Attributable to NRG Energy, Inc. | 148 | 163 | (166) | (47) | ||||||
Dividends for preferred shares | 3 | 3 | 5 | 5 | ||||||
Comprehensive Income/(Loss) Available for Common Stockholders | $ 145 | $ 160 | $ (171) | $ (52) | ||||||
NRG ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||||
June 30, 2013 | December 31, 2012 | |||||||||
(unaudited) | ||||||||||
(In millions, except shares) |
||||||||||
ASSETS | ||||||||||
Current Assets | ||||||||||
Cash and cash equivalents | $ |
1,368 |
$ |
2,087 |
||||||
Funds deposited by counterparties | 134 | 271 | ||||||||
Restricted cash | 267 | 217 | ||||||||
Accounts receivable — trade, less allowance for doubtful accounts of $32 and $32 | 1,290 | 1,061 | ||||||||
Inventory | 874 | 911 | ||||||||
Derivative instruments | 1,853 | 2,644 | ||||||||
Cash collateral paid in support of energy risk management activities | 387 | 229 | ||||||||
Deferred income taxes | 10 | 56 | ||||||||
Renewable energy grant receivable | 345 | 58 | ||||||||
Prepayments and other current assets | 415 | 401 | ||||||||
Total current assets | 6,943 | 7,935 | ||||||||
Property, plant and equipment, net of accumulated depreciation of $5,959 and $5,417 | 20,454 | 20,241 | ||||||||
Other Assets | ||||||||||
Equity investments in affiliates | 639 | 676 | ||||||||
Note receivable, less current portion | 70 | 79 | ||||||||
Goodwill | 1,954 | 1,956 | ||||||||
Intangible assets, net of accumulated amortization of $1,851 and $1,706 | 1,120 | 1,200 | ||||||||
Nuclear decommissioning trust fund | 503 | 473 | ||||||||
Derivative instruments | 587 | 662 | ||||||||
Deferred income taxes | 1,644 | 1,288 | ||||||||
Other non-current assets | 578 | 600 | ||||||||
Total other assets | 7,095 | 6,934 | ||||||||
Total Assets | $ |
34,492 |
$ |
35,110 |
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current Liabilities | ||||||||||
Current portion of long-term debt and capital leases | $ |
737 |
$ |
147 |
||||||
Accounts payable | 1,196 | 1,171 | ||||||||
Derivative instruments | 1,512 | 1,981 | ||||||||
Cash collateral received in support of energy risk management activities | 134 | 271 | ||||||||
Accrued expenses and other current liabilities | 832 | 1,100 | ||||||||
Total current liabilities | 4,411 | 4,670 | ||||||||
Other Liabilities | ||||||||||
Long-term debt and capital leases | 15,889 | 15,736 | ||||||||
Nuclear decommissioning reserve | 287 | 354 | ||||||||
Nuclear decommissioning trust liability | 287 | 273 | ||||||||
Deferred income taxes | 47 | 55 | ||||||||
Derivative instruments | 420 | 500 | ||||||||
Out-of-market contracts | 1,182 | 1,231 | ||||||||
Other non-current liabilities | 1,417 | 1,555 | ||||||||
Total non-current liabilities | 19,529 | 19,704 | ||||||||
Total Liabilities | 23,940 | 24,374 | ||||||||
3.625% convertible perpetual preferred stock (at liquidation value, net of issuance costs) | 249 | 249 | ||||||||
Commitments and Contingencies | ||||||||||
Stockholders’ Equity | ||||||||||
Common Stock | 4 | 4 | ||||||||
Additional paid-in capital | 7,615 | 7,587 | ||||||||
Retained earnings | 4,179 | 4,448 | ||||||||
Less treasury stock, at cost — 77,416,791 and 76,505,718 shares, respectively | (1,944 | ) | (1,920 | ) | ||||||
Accumulated other comprehensive loss | (118 | ) | (150 | ) | ||||||
Noncontrolling interest | 567 | 518 | ||||||||
Total Stockholders’ Equity | 10,303 | 10,487 | ||||||||
Total Liabilities and Stockholders’ Equity | $ |
34,492 |
$ |
35,110 |
||||||
NRG ENERGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||||
Six Months ended June 30 | |||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Cash Flows from Operating Activities | |||||||||
Net (loss)/ Income |
$ |
(190 |
) |
|
$ |
53 |
|||
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: | |||||||||
Distributions and equity in earnings of unconsolidated affiliates | 5 | (1 | ) | ||||||
Depreciation and amortization | 603 | 464 | |||||||
Provision for bad debts | 23 | 17 | |||||||
Amortization of nuclear fuel | 16 | 16 | |||||||
Amortization of financing costs and debt discount/premiums | (26 | ) | 17 | ||||||
Adjustment to loss on debt extinguishment | (16 | ) | 1 | ||||||
Amortization of intangibles and out-of-market contracts | 124 | 81 | |||||||
Amortization of unearned equity compensation | 24 | 18 | |||||||
Changes in deferred income taxes and liability for uncertain tax benefits | (224 | ) |
|
(145 | ) | ||||
Changes in nuclear decommissioning trust liability | 25 | 17 | |||||||
Changes in derivative instruments | 174 | 74 | |||||||
Changes in collateral deposits supporting energy risk management activities | (158 | ) |
|
240 | |||||
Cash used by changes in other working capital | (458 | ) | (267 | ) | |||||
Net Cash (Used)/Provided by Operating Activities | (78 | ) |
|
585 | |||||
Cash Flows from Investing Activities | |||||||||
Acquisitions of business, net of cash acquired | (39 | ) | — | ||||||
Capital expenditures | (1,281 | ) |
|
(1,593 | ) | ||||
Increase in restricted cash, net | (31 | ) |
|
(58 | ) | ||||
(Increase)/decrease in restricted cash to support equity requirements for U.S. DOE funded projects | (16 | ) | 142 | ||||||
Increase in notes receivable | (11 | ) |
|
(21 | ) | ||||
Investments in nuclear decommissioning trust fund securities | (233 | ) | (236 | ) | |||||
Proceeds from sales of nuclear decommissioning trust fund securities | 208 |
|
220 | ||||||
Proceeds from renewable energy grants | 48 | 35 | |||||||
Other | (20 | ) | (44 | ) | |||||
Net Cash Used by Investing Activities | (1,375 | ) |
|
(1,555 | ) | ||||
Cash Flows from Financing Activities | |||||||||
Payment of dividends to common and preferred stockholders | (73 | ) | (5 | ) | |||||
Payment for treasury stock | (25 | ) | — | ||||||
Net receipts from/(payments for) settlement of acquired derivatives that include financing elements | 171 | (44 | ) | ||||||
Proceeds from issuance of long-term debt | 1,472 | 927 | |||||||
Contributions and sales proceeds from noncontrolling interests in subsidiaries | 33 | 270 | |||||||
Proceeds from issuance of common stock | 9 | — | |||||||
Payment of debt issuance costs | (35 | ) | (12 | ) | |||||
Payments for short and long-term debt | (816 | ) | (121 | ) | |||||
Net Cash Provided by Financing Activities | 736 | 1,015 | |||||||
Effect of exchange rate changes on cash and cash equivalents | (2 | ) | (1 | ) | |||||
Net (Decrease)/Increase in Cash and Cash Equivalents | (719 | ) |
|
44 | |||||
Cash and Cash Equivalents at Beginning of Period | 2,087 | 1,105 | |||||||
Cash and Cash Equivalents at End of Period |
$ |
1,368 |
$ |
1,149 |
|||||
Appendix Table A-1: Second Quarter 2013 Regional Adjusted EBITDA Reconciliation The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
|||||||||||||||||||||
(dollars in millions) | Retail | Texas |
South Central |
East | West |
Other Conventional |
NRG Yield |
Alt. Energy |
Corp. | Total | |||||||||||
Net Income/(Loss) | (82) | 169 | 6 | 142 | 37 | (3) | 33 | (29) | (143) | 130 | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest |
- | - | - | - | - | - | - | 4 | 3 | 7 | |||||||||||
Income Tax | - | - | - | - | - | 1 | 1 | - | (63) | (61) | |||||||||||
Interest Expense, net | - | - | 4 | 14 | (1) | - | 6 | 17 | 164 | 204 | |||||||||||
Depreciation, Amortization and ARO Expense | 36 | 112 | 25 | 82 | 13 | 1 | 9 | 27 | 7 | 312 | |||||||||||
Loss on Debt Extinguishment | - | - | - | - | - | - | - | - | 21 | 21 | |||||||||||
Amortization of Contracts | 18 | 12 | (6) | (8) | (2) | - | - | - | 1 | 15 | |||||||||||
EBITDA | (28) | 293 | 29 | 230 | 47 | (1) | 49 | 19 | (10) | 628 | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | 1 | - | 1 | 4 | 12 | 6 | (8) | 16 | |||||||||||
Integration & Transaction Costs | - | - | - | - | - | - | - | - | 37 | 37 | |||||||||||
Deactivation costs | - | - | - | 6 | 2 | - | - | - | - | 8 | |||||||||||
Asset and Investment Write-offs | - | 3 | - | - | - | - | - | - | - | 3 | |||||||||||
Economic Hedge | 168 | (179) | (12) | (73) | - | - | - | (2) | - | (98) | |||||||||||
Adjusted EBITDA | 140 | 117 | 18 | 163 | 50 | 3 | 61 | 23 | 19 | 594 | |||||||||||
Appendix Table A-2: Second Quarter 2012 Regional Adjusted EBITDA Reconciliation The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
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(dollars in millions) | Retail | Texas |
South Central |
East | West |
Other Conventional |
NRG Yield |
Alt. Energy |
Corp. | Total | |||||||||||
Net Income/(Loss) | 797 | (427) | 11 | (13) | 21 | 7 | (1) | (14) | (130) | 251 | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest | - | - | - | - | - | - | - | 8 | - | 8 | |||||||||||
Income Tax | - | - | - | - | - | 2 | (1) | 1 | (15) | (13) | |||||||||||
Interest Expense, net | 1 | - | 4 | 5 | - | 1 | 16 | 1 | 135 | 163 | |||||||||||
Depreciation, Amortization and ARO Expense | 44 | 114 | 23 | 33 | 4 | - | 6 | 10 | 2 | 236 | |||||||||||
Amortization of Contracts | 33 | 11 | (4) | - | - | - | - | - | - | 40 | |||||||||||
EBITDA | 875 | (302) | 34 | 25 | 25 | 10 | 20 | 6 | (8) | 685 | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | - | - | - | 4 | 5 | 1 | (2) | 8 | |||||||||||
Asset Write Off and Impairment | - | 1 | - | - | - | - | - | - | - | 1 | |||||||||||
Transaction fee on asset sale | - | - | - | - | - | - | - | - | 1 | 1 | |||||||||||
Economic Hedge | (656) | 529 | (6) | (8) | (2) | - | - | 3 | - | (140) | |||||||||||
Adjusted EBITDA | 219 | 228 | 28 | 17 | 23 | 14 | 25 | 10 | (9) | 555 | |||||||||||
Appendix Table A-3: YTD Second Quarter 2013 Regional Adjusted EBITDA Reconciliation The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
|||||||||||||||||||||
(dollars in millions) | Retail | Texas |
South Central |
East | West |
Other Conventional |
NRG Yield |
Alt. Energy |
Corp. | Total | |||||||||||
Net Income/(Loss) | 287 | (257) | (1) | (17) | 30 | - | 40 | (55) | (225) | (198) | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest | - | - | - | - | - | - | - | 5 | 3 | 8 | |||||||||||
Income Tax | - | - | - | - | - | 1 | 5 | - | (216) | (210) | |||||||||||
Interest Expense, net | 1 | - | 8 | 27 | (1) | - | 11 | 23 | 328 | 397 | |||||||||||
Depreciation, Amortization and ARO Expense | 68 | 225 | 49 | 162 | 27 | 2 | 19 | 51 | 10 | 613 | |||||||||||
Loss on Debt Extinguishment | - | - | - | - | - | - | - | - | 49 | 49 | |||||||||||
Amortization of Contracts | 39 | 21 | (11) | (19) | (4) | - | - | - | - | 26 | |||||||||||
EBITDA | 395 | (11) | 45 | 153 | 52 | 3 | 75 | 24 | (51) | 685 | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | 1 | - | 1 | 8 | 20 | 11 | (8) | 33 | |||||||||||
Integration & Transaction Costs | - | - | - | - | - | - | - | - | 69 | 69 | |||||||||||
Deactivation costs | - | - | - | 9 | 2 | - | - | - | - | 11 | |||||||||||
Asset and Investment Write-offs | - | 3 | - | - | - | - | - | - | 1 | 4 | |||||||||||
Economic Hedge | (152) | 197 | (37) | 159 | (1) | - | - | (1) | - | 165 | |||||||||||
Adjusted EBITDA | 243 | 189 | 9 | 321 | 54 | 11 | 95 | 34 | 11 | 967 | |||||||||||
Appendix Table A-4: YTD Second Quarter 2012 Regional Adjusted EBITDA Reconciliation The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
|||||||||||||||||||||
(dollars in millions) | Retail | Texas |
South Central |
East | West |
Other Conventional |
NRG Yield |
Alt. Energy |
Corp. | Total | |||||||||||
Net Income/(Loss) | 804 | (501) | (19) | (61) | 7 | 13 | 4 | (29) | (174) | 44 | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest | - | - | - | - | - | - | - | 9 | - | 9 | |||||||||||
Income Tax | - | - | - | - | - | 4 | 2 | 1 | (140) | (133) | |||||||||||
Interest Expense, net | 2 | - | 9 | 9 | (1) | 1 | 20 | 7 | 281 | 328 | |||||||||||
Depreciation, Amortization and ARO Expense | 85 | 229 | 46 | 65 | 7 | - | 12 | 19 | 4 | 467 | |||||||||||
Amortization of Contracts | 67 | 19 | (9) | - | - | 1 | - | - | - | 78 | |||||||||||
EBITDA | 958 | (253) | 27 | 13 | 13 | 19 | 38 | 7 | (29) | 793 | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | - | - | 1 | 8 | 12 | - | - | 21 | |||||||||||
Legal Settlement | - | - | - | - | 20 | - | - | - | - | 20 | |||||||||||
Transaction fee on asset sale | - | - | - | - | - | - | - | - | 9 | 9 | |||||||||||
Asset and Investment Write-offs | - | 2 | - | - | - | - | - | - | 1 | 3 | |||||||||||
Economic Hedge | (627) | 618 | 25 | 4 | 4 | - | - | 1 | - | 25 | |||||||||||
Adjusted EBITDA | 331 | 367 | 52 | 17 | 38 | 27 | 50 | 8 | (19) | 871 | |||||||||||
Appendix Table A-5: 2013 and 2012 YTD Second Quarter 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 |
||||||
(dollars in millions) |
Six months ended June 30, 2013 |
Six months ended June 30, 2012 |
||||
Net Cash (Used)/Provided by Operating Activities | (78) | 585 | ||||
Adjustment for change in collateral | 158 | (240) | ||||
Reclassifying of net receipts (payments) for settlement of acquired derivatives that include financing elements |
171 | (44) | ||||
Add: GenOn Merger and integration costs | 80 | — | ||||
Adjusted Cash Flow from Operating Activities | 331 | 301 | ||||
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.
Source:
NRG Energy, Inc.
Media:
Karen Cleeve, 609-524-4608
Dave
Knox, 713-537-2130
or
Investors:
Chad Plotkin,
609-524-4526
Lori Stagliano, 609-524-4528