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NRG Energy, Inc. Reports Full-Year and Fourth Quarter Results; Exceeds 2013 Guidance, Announces Dividend Increase and Reaffirms 2014 Guidance
Full-Year 2013 Financial Highlights
-
$2,636 million of Adjusted EBITDA; including$1,778 million delivered by NRG’s wholesale business,$614 million delivered by NRG retail business and$244 million delivered byNRG Yield ; -
$1,282 million of Free Cash Flow (FCF) before Growth investments for the full-year of 2013 and$386 million in the fourth quarter; -
$3,695 million of total liquidity as ofDecember 31, 2013
2014 Guidance1
-
Reaffirming 2014 Guidance as follows:
-
Adjusted EBITDA of
$2,700-$2,900 million -
FCF before Growth investments of
$950-$1,150 million
-
Adjusted EBITDA of
Business and Operational Highlights
-
Successful integration of GenOn resulting in
$484 million in Free Cash Flow before Growth benefits, an increase of$184 million from the original announcement; -
Completed the IPO of
NRG Yield , receiving net proceeds of approximately$462 million from the offering; -
Achieved commercial operations of over 2 GW of solar and conventional
generation projects, driving over
$500 million of projected annualized Adjusted EBITDA; - Retail customer count increased by about 65,000 during 2013;
-
Acquired Energy Curtailment Specialists (ECS), one of the largest demand response providers inNorth America ; -
Acquired the 388 MW, 160 MWt Gregory cogeneration plant in
Texas
Capital Allocation
-
Increasing annual common stock dividend by additional 17% from
$0.48 to$0.56 per share, a total increase of 56% from the initial$0.36 per share in 2012; and -
Agreed to acquire substantially all of Edison Mission Energy’s (EME)
assets for
$2,635 million , including$1,063 million of acquired cash – funded with$800 million of cash on hand and$700 million from recently issued 2022 Senior Notes
1 Guidance for NRG Standalone, excluding any impact from pending EME transaction
Fourth quarter Adjusted EBITDA was
Full-year 2013 FCF was
“The core commodity-side of our business demonstrated remarkable
strength in the fourth quarter which has continued into 2014, giving us
a running start on a good year,” said
NRG had another year of strong safety and operating performance in 2013.
The
Segment Results | |||||||||
Table 1: Adjusted EBITDA | |||||||||
($ in millions) | Three Months Ended | Twelve Months Ended | |||||||
Segment | 12/31/13 | 12/31/12(2) | 12/31/13 | 12/31/12(2) | |||||
Retail | 191 | 152 | 614 | 656 | |||||
Wholesale | |||||||||
Gulf Coast | |||||||||
|
91 | 190 | 502 | 880 | |||||
|
- | 18 | 43 | 101 | |||||
East | 264 | 31 | 1,004 | 102 | |||||
West | 49 | 19 | 167 | 88 | |||||
Other | 10 | 5 | 28 | 43 | |||||
NRG Yield | 66 | 22 | 244 | 101 | |||||
Alternative Energy | 16 | 16 | 91 | 47 | |||||
Corporate | (18) | (17) | (57) | (33) | |||||
Adjusted EBITDA(1) | 669 | 436 | 2,636 | 1,985 |
(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 | Twelve Months Ended | |||||||
Segment | 12/31/13(1) | 12/31/12(2) | 12/31/13(1) |
12/31/12(2) |
|||||
Retail | 331 | 37 | 562 | 541 | |||||
Wholesale | |||||||||
Gulf Coast | |||||||||
|
(191) | 108 | (177) | (94) | |||||
|
(4) | 2 | 13 | 2 | |||||
East | (355) | (24) | (139) | (55) | |||||
West | 16 | 17 | 78 | 59 | |||||
Other | (58) | 3 | (56) | 21 | |||||
NRG Yield | 20 | 5 | 96 | 13 | |||||
Alternative Energy | (33) | (12) | (108) | (57) | |||||
Corporate | (16) | 116 | (655) | (135) | |||||
Net Income/(Loss) | (290) | 252 | (386) | 295 |
(1) Results include
(2) Results include
Retail: Full-Year 2013 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Wholesale:
Fourth quarter Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
East: Full-year 2013 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
West: Full-year 2013 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Alternative Energy: Full-year 2013 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Liquidity and Capital Resources | |||||||
Table 3: Corporate Liquidity | |||||||
($ in millions) | 12/31/13 | 9/30/13 | 12/31/12 | ||||
Cash and Cash Equivalents | 2,254 | 2,129 | 2,087 | ||||
Restricted cash | 268 | 307 | 217 | ||||
Total | 2,522 | 2,436 | 2,304 | ||||
Total Credit Facility Availability | 1,173 | 1,235 | 1,058 | ||||
Total Liquidity | 3,695 | 3,671 | 3,362 |
Total liquidity as of
-
$2,187 million of cash inflows throughDecember 2013 , consisting of the following items:-
$1,725 million of adjusted cash flow from operations; and -
$462 million of proceeds from NRG Yield IPO; and
-
-
Partially offset by
$1,969 million of cash outflows throughDecember 2013 , consisting of the following items:-
$494 million for acquisitions, net of cash acquired; -
$485 million net debt payments consisting of$775 million repurchase of Senior Notes and$160 million repayments of debt; partially offset by$450 million in proceeds from the Term Loan B issuance; -
$429 million of maintenance and environmental capital expenditures, net; -
$179 million return to shareholders consisting of$154 million of common and preferred stock dividends and$25 million share repurchases; -
$173 million of merger and integration expenses; -
$143 million of solar and conventional growth investments (excluding solar acquisitions and cash grant debt repayments), net of debt proceeds, third party funding and cash grant proceeds net of debt repayments; -
$66 million of other investing and financing, net
-
Growth Initiatives and Strategic Developments
NRG continued to enhance its competitiveness and strategic positioning through a wide range of growth initiatives, including:
Acquisition of Edison Mission Energy
On
IPO of
On
Conventional
-
Marsh Landing – On
May 1, 2013 , the Company achieved commercial operations at its Marsh Landing Generating station, a 720 MW fast-start, gas-fired peaking facility nearAntioch, California . The facility is contracted withPacific Gas and Electric Co. (PG&E ) under a 10-year PPA. -
El Segundo – OnAugust 1, 2013 , the Company achieved commercial operations at its El Segundo Energy Center, a 550 MW fast-start, gas-fired combined cycle generating facility inEl Segundo, California . The facility is contracted with Southern California Edison (SCE) under a 10-year PPA. -
Gregory – OnAugust 7, 2013 , the Company closed on the acquisition of the 388 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 was funded by$120 million of Term Loan proceeds and NRG equity.
Solar
-
Agua Caliente – As ofDecember 31, 2013 , achieved commercial operations of 290 MW of generation capacity ofAgua Caliente , making it the largest operating solar PV project in the world. Construction is several months ahead of schedule and is currently expected to reach full completion in early 2014. Power generated byAgua Caliente is being sold under a 25-year PPA toPG&E . NRG owns a 51% interest in the project. -
CVSR – On
October 31, 2013 , achieved full and on-time commercial operations of the 250 MW CVSR project. Power from this project is being sold toPG&E under 25-year PPAs. -
Ivanpah – On
December 31, 2013 , achieved commercial operations of the 378 MW Ivanpah project, now the world’s largest solar thermal power project, generating enough electricity to power 140,000California homes. Power from Units 1 and 3 is being sold toPG&E via two 25-year PPAs, and power from Unit 2 is being sold to SCE under a 20-year PPA.
Outlook for 2014
NRG is reaffirming its Adjusted EBITDA and FCF before Growth investments guidance for 2014.
Table 4: 2014 Adjusted EBITDA and FCF before Growth investments Guidance1 |
||
2/28/2014 | ||
($ in millions) | 2014 | |
Adjusted EBITDA | 2,700 – 2,900 | |
Interest payments2 |
(950) | |
Income tax | (40) | |
Working capital/other changes | (105) | |
Adjusted Cash flow from operations | 1,605 – 1,805 | |
Maintenance capital expenditures, net | (335)-(355) | |
Environmental capital expenditures, net | (230)-(250) | |
Preferred dividends | (9) | |
Distributions to non-controlling interests | (60) | |
Free cash flow – before Growth investments | 950 – 1,150 |
1 Guidance for NRG standalone, excluding any impact from pending EME transaction
2 Excludes interest payments from
Notes - subtotals and totals are rounded
2014 Capital Allocation Program
NRG is announcing a 17% increase in its annual common stock dividend
from
On
The Company's common stock dividend and debt reduction are subject to available capital, market conditions and compliance with associated laws and regulations.
Drop-Down of Assets to
In the first quarter of 2014,
- TA High Desert – 20 MW solar facility located in LA County, CA
-
RE Kansas South – 20 MW solar facility located in
Kings County, CA - El Segundo Energy Center – 550 MW fast-start, gas-fired facility located in LA County, CA
The cash proceeds from these drop-downs would increase NRG’s capital available for allocation.
On
Earnings Conference Call
On
Additional Information
NRG has filed a registration statement (including a prospectus) with the
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 500 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
– 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 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) | ||||||||||||
For the Year Ended December 31, | ||||||||||||
(In millions, except per share amounts) |
2013 | 2012 | 2011 | |||||||||
Operating Revenues | ||||||||||||
Total operating revenues | $ | 11,295 | $ | 8,422 | $ | 9,079 | ||||||
Operating Costs and Expenses | ||||||||||||
Cost of operations | 8,121 | 6,140 | 6,745 | |||||||||
Depreciation and amortization | 1,256 | 950 | 896 | |||||||||
Impairment losses | 459 |
- |
160 | |||||||||
Selling, general and administrative | 904 | 807 | 586 | |||||||||
Acquisition-related transaction and integration costs | 128 | 107 |
- |
|||||||||
Development activity expenses | 84 | 68 | 57 | |||||||||
Total operating costs and expenses | 10,952 | 8,072 | 8,444 | |||||||||
Operating Income | 343 | 350 | 635 | |||||||||
Other Income/(Expense) | ||||||||||||
Equity in earnings of unconsolidated affiliates | 7 | 37 | 35 | |||||||||
Bargain purchase gain related to GenOn acquisition |
- |
296 |
- |
|||||||||
Impairment losses on investments | (99 | ) | (2 | ) | (495 | ) | ||||||
Other income, net | 13 | 19 | 19 | |||||||||
Loss on debt extinguishment | (50 | ) | (51 | ) | (175 | ) | ||||||
Interest expense | (848 | ) | (661 | ) | (665 | ) | ||||||
Total other expense | (977 | ) | (362 | ) | (1,281 | ) | ||||||
Loss Before Income Taxes | (634 | ) | (12 | ) | (646 | ) | ||||||
Income tax benefit | (282 | ) | (327 | ) | (843 | ) | ||||||
Net (Loss)/Income | (352 | ) | 315 | 197 | ||||||||
Less: Net income attributable to noncontrolling interest | 34 | 20 |
- |
|||||||||
Net (Loss)/Income Attributable to NRG Energy, Inc. | (386 | ) | 295 | 197 | ||||||||
Dividends for preferred shares | 9 | 9 | 9 | |||||||||
(Loss)/Income Available for Common Stockholders | $ | (395 | ) | $ | 286 | $ | 188 | |||||
(Loss)/Earnings Per Share Attributable to NRG Energy, Inc. Common Stockholders | ||||||||||||
Weighted average number of common shares outstanding - basic |
323 | 232 | 240 | |||||||||
Net (Loss)/Income per Weighted Average Common Share - Basic |
$ | (1.22 | ) | $ | 1.23 | $ | 0.78 | |||||
Weighted average number of common shares outstanding - diluted |
323 | 234 | 241 | |||||||||
Net (Loss)/Income per Weighted Average Common Share - Diluted |
$ | (1.22 | ) | $ | 1.22 | $ | 0.78 | |||||
Dividends Per Common Share | $ | 0.45 | $ | 0.18 | $ |
- |
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME/(LOSS) | ||||||||||||
(Unaudited) | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
(In millions) | ||||||||||||
Net (Loss)/Income | $ | (352 | ) | $ | 315 | $ | 197 | |||||
Other Comprehensive Income/(Loss), net of tax | ||||||||||||
Unrealized gain/(loss) on derivatives, net of income tax benefit of $6, $94, and $181 | 8 | (163 | ) | (309 | ) | |||||||
Foreign currency translation adjustments, net of income tax benefit of $14, $1, and $1 | (24 | ) | (1 | ) | (2 | ) | ||||||
Reclassification adjustment for translation gain realized upon sale of Schkopau, net of income tax benefit of $0, $6, and $0 |
- |
(11 | ) |
- |
||||||||
Available-for-sale securities, net of income tax expense of $2, $1, and $0 | 3 | 3 | (1 | ) | ||||||||
Defined benefit plan, net of income tax (expense)/benefit of $(100), $21, and $27 | 168 | (52 | ) | (46 | ) | |||||||
Other comprehensive income/(loss) | 155 | (224 | ) | (358 | ) | |||||||
Comprehensive (Loss)/Income | (197 | ) | 91 | (161 | ) | |||||||
Less: Comprehensive income attributable to noncontrolling interest | 34 | 20 |
- |
|||||||||
Comprehensive (Loss)/Income Attributable to NRG Energy, Inc. | (231 | ) | 71 | (161 | ) | |||||||
Dividends for preferred shares | 9 | 9 | 9 | |||||||||
Comprehensive (Loss)/Income Available for Common Stockholders | $ | (240 | ) | $ | 62 | $ | (170 | ) |
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(In millions) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 2,254 | $ | 2,087 | ||||
Funds deposited by counterparties | 63 | 271 | ||||||
Restricted cash | 268 | 217 | ||||||
Accounts receivable — trade, less allowance for doubtful accounts of $40 and $32 | 1,214 | 1,061 | ||||||
Inventory | 898 | 903 | ||||||
Derivative instruments | 1,328 | 2,644 | ||||||
Cash collateral paid in support of energy risk management activities | 276 | 229 | ||||||
Deferred income taxes | 258 | 56 | ||||||
Renewable energy grant receivable | 539 | 58 | ||||||
Prepayments and other current assets | 498 | 446 | ||||||
Total current assets | 7,596 | 7,972 | ||||||
Property, Plant and Equipment | ||||||||
In service | 23,649 | 21,133 | ||||||
Under construction | 2,775 | 4,428 | ||||||
Total property, plant and equipment | 26,424 | 25,561 | ||||||
Less accumulated depreciation | (6,573 | ) | (5,408 | ) | ||||
Net property, plant and equipment | 19,851 | 20,153 | ||||||
Other Assets | ||||||||
Equity investments in affiliates | 453 | 676 | ||||||
Notes receivable, less current portion | 73 | 79 | ||||||
Goodwill | 1,985 | 1,956 | ||||||
Intangible assets, net of accumulated amortization of $1,977 and $1,706 | 1,140 | 1,210 | ||||||
Nuclear decommissioning trust fund | 551 | 473 | ||||||
Derivative instruments | 311 | 662 | ||||||
Deferred income taxes | 1,202 | 1,203 | ||||||
Other non-current assets | 740 | 599 | ||||||
Total other assets | 6,455 | 6,858 | ||||||
Total Assets | $ | 33,902 | $ | 34,983 |
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
As of December 31, | ||||||||
2013 | 2012 | |||||||
(In millions, except share data) | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Current portion of long-term debt and capital leases | $ | 1,050 | $ | 147 | ||||
Accounts payable | 1,038 | 1,172 | ||||||
Derivative instruments | 1,055 | 1,981 | ||||||
Cash collateral received in support of energy risk management activities | 63 | 271 | ||||||
Accrued interest expense | 185 | 191 | ||||||
Other accrued expenses | 480 | 539 | ||||||
Other current liabilities | 333 | 369 | ||||||
Total current liabilities | 4,204 | 4,670 | ||||||
Other Liabilities | ||||||||
Long-term debt and capital leases | 15,767 | 15,736 | ||||||
Nuclear decommissioning reserve | 294 | 354 | ||||||
Nuclear decommissioning trust liability | 324 | 273 | ||||||
Postretirement and other benefit obligations | 506 | 803 | ||||||
Deferred income taxes | 22 | 55 | ||||||
Derivative instruments | 195 | 500 | ||||||
Out-of-market contracts | 1,177 | 1,278 | ||||||
Other non-current liabilities | 695 | 796 | ||||||
Total non-current liabilities | 18,980 | 19,795 | ||||||
Total Liabilities | 23,184 | 24,465 | ||||||
3.625% convertible perpetual preferred stock; $0.01 par value; 250,000 shares issued and outstanding (at liquidation value of $250, net of issuance costs) | 249 | 249 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity | ||||||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 401,126,780 and 399,112,616 shares issued and 323,779,252 and 322,606,898 shares outstanding at December 31, 2013 and 2012 | 4 | 4 | ||||||
Additional paid-in capital | 7,840 | 7,587 | ||||||
Retained earnings | 3,695 | 4,230 | ||||||
Less treasury stock, at cost; 77,347,528 and 76,505,718 shares at December 31, 2013 and 2012 | (1,942 | ) | (1,920 | ) | ||||
Accumulated other comprehensive income/(loss) | 5 | (150 | ) | |||||
Noncontrolling interest | 867 | 518 | ||||||
Total Stockholders' Equity | 10,469 | 10,269 | ||||||
Total Liabilities and Stockholders' Equity | $ | 33,902 | $ | 34,983 |
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
(Unaudited) | ||||||||||||
For the Year Ended | ||||||||||||
December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
(In millions) | ||||||||||||
Cash Flows from Operating Activities | ||||||||||||
Net (loss)/income | $ | (352 | ) | $ | 315 | $ | 197 | |||||
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: | ||||||||||||
Distributions and equity in earnings of unconsolidated affiliates | 84 | 2 | 9 | |||||||||
Bargain purchase gain related to GenOn acquisition |
- |
(296 | ) |
- |
||||||||
Depreciation and amortization | 1,256 | 950 | 896 | |||||||||
Provision for bad debts | 67 | 45 | 59 | |||||||||
Amortization of nuclear fuel | 36 | 39 | 39 | |||||||||
Amortization of financing costs and debt discount/premiums | (33 | ) | 31 | 32 | ||||||||
Adjustment to loss on debt extinguishment | (15 | ) | 9 | 58 | ||||||||
Amortization of intangibles and out-of-market contracts | 49 | 146 | 167 | |||||||||
Amortization of unearned equity compensation | 38 | 41 | 28 | |||||||||
(Gain)/Loss on disposals and sales of assets, net | (3 | ) | 11 | 14 | ||||||||
Impairment losses | 558 |
- |
657 | |||||||||
Changes in derivative instruments | 164 | 124 | (138 | ) | ||||||||
Changes in deferred income taxes and liability for uncertain tax benefits | (67 | ) | (353 | ) | (859 | ) | ||||||
Changes in nuclear decommissioning trust liability | 15 | 37 | 20 | |||||||||
Cash (used)/provided by changes in other working capital, net of acquisition and disposition effects: | ||||||||||||
Accounts receivable - trade | (224 | ) | (131 | ) | (119 | ) | ||||||
Inventory | 11 | (172 | ) | 145 | ||||||||
Prepayments and other current assets | (22) | (26 | ) | 59 | ||||||||
Accounts payable | 275 | (132 | ) | 9 | ||||||||
Accrued expenses and other current liabilities | (114 | ) | 231 | (111 | ) | |||||||
Other assets and liabilities | (453 | ) | 278 | 4 | ||||||||
Net Cash Provided by Operating Activities | 1,270 | 1,149 | 1,166 | |||||||||
Cash Flows from Investing Activities | ||||||||||||
Acquisition of businesses, net of cash acquired | (494 | ) | (81 | ) | (377 | ) | ||||||
Cash acquired in GenOn acquisition |
- |
983 |
- |
|||||||||
Capital expenditures | (1,987 | ) | (3,396 | ) | (2,310 | ) | ||||||
Increase in restricted cash, net | (22 | ) | (66 | ) | (35 | ) | ||||||
(Increase)/decrease in restricted cash to support equity requirements for U.S. DOE funded projects | (26 | ) | 164 | (215 | ) | |||||||
(Increase)/decrease in notes receivable | (11 | ) | (24 | ) | 12 | |||||||
Proceeds from renewable energy grants | 55 | 62 |
- |
|||||||||
Purchases of emission allowances, net of proceeds | 5 | (1 | ) | (19 | ) | |||||||
Investments in nuclear decommissioning trust fund securities | (514 | ) | (436 | ) | (406 | ) | ||||||
Proceeds from sales of nuclear decommissioning trust fund securities | 488 | 399 | 385 | |||||||||
Proceeds from sale of assets, net | 13 | 137 | 7 | |||||||||
Investments in unconsolidated affiliates |
- |
(25 | ) | (66 | ) | |||||||
Other | (35 | ) | 22 | (23 | ) | |||||||
Net Cash Used by Investing Activities | (2,528 | ) | (2,262 | ) | (3,047 | ) | ||||||
Cash Flows from Financing Activities | ||||||||||||
Payment of dividends to preferred and common stockholders | (154 | ) | (50 | ) | (9 | ) | ||||||
Net receipts/(payments for) from settlement of acquired derivatives that include financing elements | 267 | (68 | ) | (83 | ) | |||||||
Payment for treasury stock | (25 | ) |
- |
(430 | ) | |||||||
Sales proceeds and other contributions from noncontrolling interests in subsidiaries | 531 | 347 | 29 | |||||||||
Proceeds from issuance of common stock | 16 |
- |
2 | |||||||||
Proceeds from issuance of long-term debt | 1,777 | 3,165 | 6,224 | |||||||||
Payments for term loan for funded letter of credit facility |
- |
- |
(1,300 | ) | ||||||||
Decrease in restricted cash supporting funded letter of credit facility |
- |
- |
1,300 | |||||||||
Payment of debt issuance and hedging costs | (50 | ) | (35 | ) | (207 | ) | ||||||
Payments for short and long-term debt | (935 | ) | (1,260 | ) | (5,493 | ) | ||||||
Net Cash Provided by Financing Activities | 1,427 | 2,099 | 33 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (2 | ) | (4 | ) | 2 | |||||||
Net Increase/(Decrease) in Cash and Cash Equivalents | 167 | 982 | (1,846 | ) | ||||||||
Cash and Cash Equivalents at Beginning of Period | 2,087 | 1,105 | 2,951 | |||||||||
Cash and Cash Equivalents at End of Period | $ | 2,254 | $ | 2,087 | $ | 1,105 |
Appendix Table A-1: Fourth Quarter 2013 Regional Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss)
South | Other | NRG | Alt. | ||||||||||||||||||
($ in millions) | Retail | Texas | Central | East | West | Conventional | Yield | Energy | Corp. | Total | |||||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc | 331 | (191) | (4) | (355) | 16 | (58) | 20 | (33) | (16) | (290) | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest | - | - | - | - | - | - | 4 | - | 3 | 7 | |||||||||||
Interest Expense, net | - | 1 | 6 | 18 | 8 | - | 10 | 18 | 154 | 215 | |||||||||||
Income Tax | - | - | - | - | - | (30) | 3 | - | (208) | (235) | |||||||||||
Depreciation Amortization and ARO Expense | 38 | 118 | 25 | 64 | 19 | 1 | 16 | 31 | 6 | 318 | |||||||||||
Amortization of Contracts | 6 | 8 | (5) | (42) | 1 | - | 1 | - | - | (31) | |||||||||||
EBITDA | 375 | (64) | 22 | (315) | 44 | (87) | 54 | 16 | (61) | (16) | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | - | - | 4 | 4 | 12 | (1) | - | 19 | |||||||||||
Integration & Transaction Costs | - | - | - | - | - | - | - | - | 33 | 33 | |||||||||||
Deactivation costs | - | - | - | 5 | - | - | - | - | - | 5 | |||||||||||
Legal Settlement | 3 | - | - | - | - | - | - | - | - | 3 | |||||||||||
Asset and Investment Write-offs | - | - | (1) | 459 | - | 93 | - | - | 7 | 558 | |||||||||||
Market to Market (MtM) losses/(gains) on economic hedges | (187) | 155 | (21) | 115 | 1 | - | - | 1 | 3 | 67 | |||||||||||
Adjusted EBITDA | 191 | 91 | - | 264 | 49 | 10 | 66 | 16 | (18) | 669 |
Appendix Table A-2: Fourth Quarter 2012 Regional Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss)
South | Other | NRG | Alt. | ||||||||||||||||||
($ in millions) | Retail | Texas | Central | East | West | Conventional | Yield | Energy | Corp. | Total | |||||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc | 37 | 108 | 2 | (24) | 17 | 3 | 5 | (12) | 116 | 252 | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest | - | - | - | - | - | - | - | 2 | - | 2 | |||||||||||
Interest Expense, net | 1 | - | 4 | 6 | 1 | (2) | 2 | 11 | 140 | 163 | |||||||||||
Loss on Debt Extinguishment | - | - | - | - | - | - | - | - | 10 | 10 | |||||||||||
Income Tax | - | - | - | - | - | (1) | - | - | (80) | (81) | |||||||||||
Depreciation Amortization and ARO Expense | 36 | 116 | 24 | 43 | 5 | 1 | 7 | 15 | 4 | 251 | |||||||||||
Amortization of Contracts | 32 | 9 | (5) | (1) | - | - | - | - | - | 35 | |||||||||||
EBITDA | 106 | 233 | 25 | 24 | 23 | 1 | 14 | 16 | 190 | 632 | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | 2 | - | 1 | 4 | 8 | - | - | 15 | |||||||||||
Merger and Transaction Costs | - | - | - | - | - | - | - | - | 112 | 112 | |||||||||||
Deactivation Costs | - | - | - | 3 | - | - | - | - | - | 3 | |||||||||||
Bargain Purchase Gain | - | - | - | - | - | - | - | - | (296) | (296) | |||||||||||
Asset Write Off and Impairment | - | - | 9 | - | - | - | - | - | - | 9 | |||||||||||
Transaction fee on asset sale | - | - | - | - | - | - | - | - | (23) | (23) | |||||||||||
MtM losses/(gains) on economic hedges | 46 | (43) | (18) | 4 | (5) | - | - | - | - | (16) | |||||||||||
Adjusted EBITDA | 152 | 190 | 18 | 31 | 19 | 5 | 22 | 16 | (17) | 436 |
Appendix Table A-3: Full-Year 2013 Regional Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss)
South | Other | NRG | Alt. | ||||||||||||||||||
($ in millions) | Retail | Texas | Central | East | West | Conventional | Yield | Energy | Corp. | Total | |||||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc | 562 | (177) | 13 | (139) | 78 | (56) | 96 | (108) | (655) | (386) | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest | - | - | - | - | - | - | 13 | 27 | (6) | 34 | |||||||||||
Interest Expense, net | 2 | 1 | 18 | 57 | 13 | - | 34 | 55 | 656 | 836 | |||||||||||
Loss on Debt Extinguishment | - | - | - | - | - | - | - | - | 50 | 50 | |||||||||||
Income Tax | - | - | - | - | - | (29) | 8 | - | (261) | (282) | |||||||||||
Depreciation Amortization and ARO Expense | 143 | 460 | 99 | 329 | 60 | 4 | 51 | 109 | 21 | 1,276 | |||||||||||
Amortization of Contracts | 55 | 39 | (22) | (46) | (4) | - | 2 | - | - | 24 | |||||||||||
EBITDA | 762 | 323 | 108 | 201 | 147 | (81) | 204 | 83 | (195) | 1,552 | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | 2 | - | 18 | 16 | 40 | 3 | - | 79 | |||||||||||
Integration & Transaction Costs | - | - | - | - | - | - | - | - | 128 | 128 | |||||||||||
Deactivation costs | - | - | - | 19 | 4 | - | - | - | - | 23 | |||||||||||
Legal Settlement | 3 | - | - | - | - | - | - | - | - | 3 | |||||||||||
Asset and Investment Write-offs | - | 2 | - | 460 | - | 93 | - | 4 | 7 | 566 | |||||||||||
MtM losses/(gains) on economic hedges | (151) | 177 | (67) | 324 | (2) | - | - | 1 | 3 | 285 | |||||||||||
Adjusted EBITDA | 614 | 502 | 43 | 1,004 | 167 | 28 | 244 | 91 | (57) | 2,636 |
Appendix Table A-4: Full-Year 2012 Regional Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss)
South | Other | NRG | Alt. | ||||||||||||||||||
($ in millions) | Retail | Texas | Central | East | West | Conventional | Yield | Energy | Corp. | Total | |||||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc | 541 | (94) | 2 | (55) | 59 | 21 | 13 | (57) | (135) | 295 | |||||||||||
Plus: | |||||||||||||||||||||
Net Income Attributable to Non-Controlling Interest | - | - | - | - | - | - | - | 20 | - | 20 | |||||||||||
Interest Expense, net | 4 | - | 18 | 18 | 1 | - | 27 | 26 | 558 | 652 | |||||||||||
Loss on Debt Extinguishment | - | - | - | - | - | - | - | - | 51 | 51 | |||||||||||
Income Tax | - | - | - | - | - | 3 | 10 | - | (340) | (327) | |||||||||||
Depreciation Amortization and ARO Expense | 162 | 461 | 93 | 140 | 16 | 2 | 25 | 49 | 12 | 960 | |||||||||||
Amortization of Contracts | 115 | 41 | (20) | (1) | - | - | 1 | - | - | 136 | |||||||||||
EBITDA | 822 | 408 | 93 | 102 | 76 | 26 | 76 | 38 | 146 | 1,787 | |||||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | 2 | - | 2 | 17 | 25 | 9 | - | 55 | |||||||||||
Merger and Transaction Costs | - | - | - | - | - | - | - | - | 112 | 112 | |||||||||||
Deactivation Costs | - | - | - | 3 | - | - | - | - | - | 3 | |||||||||||
Bargain Purchase Gain | - | - | - | - | - | - | - | - | (296) | (296) | |||||||||||
Asset Write Off and Impairment | - | 8 | 9 | - | - | - | - | - | 5 | 22 | |||||||||||
Legal Settlement | - | - | 14 | - | 20 | - | - | - | - | 34 | |||||||||||
MtM losses/(gains) on economic hedges | (166) | 464 | (17) | (3) | (10) | - | - | - | - | 268 | |||||||||||
Adjusted EBITDA | 656 | 880 | 101 | 102 | 88 | 43 | 101 | 47 | (33) | 1,985 |
Appendix Table A-5: 2013 and 2012 QTD Fourth 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
Three months ended | Three months ended | ||||
($ in millions) | December 31, 2013 | December 31, 2012 ((1)) | |||
Net Cash Provided by Operating Activities | 447 | 91 | |||
Adjustment for change in collateral | (12) | 131 | |||
Reclassifying of net receipts (payments) for settlement of acquired derivatives that include financing elements | 90 | (3) | |||
Add: Merger and integration expenses | 25 | 46 | |||
Adjusted Cash Flow from Operating Activities | 550 | 265 | |||
Maintenance CapEx, net | (103) | (64) | |||
Environmental CapEx, net | (54) | 24 | |||
Preferred dividends | (2) | (2) | |||
Distributions to non-controlling interests | (5) | _ | |||
Free cash flow – before Growth investments | 386 | 223 |
(1) Revised to reflect new Adjusted Cash Flow from Operating Activities methodology
Appendix Table A-6: 2013 and 2012 YTD Fourth 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
Twelve months ended | Twelve months ended | ||||
($ in millions) | December 31, 2013 | December 31, 2012((1)) | |||
Net Cash Provided by Operating Activities | 1,270 | 1,149 | |||
Adjustment for change in collateral | 47 | (82) | |||
Reclassifying of net receipts (payments) for settlement of acquired derivatives that include financing elements | 267 | (68) | |||
Add: Merger and integration expenses | 141 | 46 | |||
Adjusted Cash Flow from Operating Activities | 1,725 | 1,045 | |||
Maintenance CapEx, net | (325) | (215) | |||
Environmental CapEx, net | (104) | (5) | |||
Preferred dividends | (9) | (9) | |||
Distributions to non-controlling interests | (5) | — | |||
Free cash flow – before Growth investments | 1,282 | 816 |
(1) Revised to reflect new Adjusted Cash Flow from Operating Activities methodology
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, 832-357-5730
or
Investors:
Chad Plotkin,
609-524-4526
Daniel Keyes, 609-524-4527