Key Highlights
- Increasing and narrowing 2016
Adjusted EBITDA guidance, and initiating 2017 Adjusted EBITDA and
Free Cash Flow before Growth (FCFbG) guidance
- Repurchased $440 million1
of corporate debt since second quarter 2016; total of $1.0
billion of corporate debt retired since third quarter 2015
generating approximately $78 million2 of net
annualized interest savings
- Acquisition of 1.5
GWac3 (2.1 GWdc) of
utility-scale and 29 MWac distributed renewable
generation from SunEdison
NRG Energy, Inc. (NYSE:NRG):
Financial Results
Three Months Ended Nine Months
Ended ($ in millions)
9/30/16 9/30/15
9/30/16 9/30/15 Net Income/(Loss) $ 393 $ 67 $
164 $ (78 ) Cash From Operations $ 860 $ 934 $ 1,733 $ 1,392
Adjusted EBITDA
$ 1,173 $ 1,103 $ 2,765 $ 2,585 Free Cash Flow (FCF) Before Growth
Investments $ 911 $ 861 $
1,131 $ 1,135
- Net income of $393 million in the third
quarter 2016, compared with a net income of $67 million in the
third quarter 2015. After adjusting for the $266 million gain on
sale of assets in the third quarter 2016 and $263 million of
impairments in the third quarter 2015, net income declined $203
million related to lower energy margins and increased debt
extinguishment costs.
- Adjusted EBITDA of $1,173 million for
the third quarter 2016 represents a $70 million increase compared
to the third quarter 2015.
NRG Energy, Inc. (NYSE:NRG) today reported third quarter net
income of $393 million. The net income for the first nine months of
2016 was $164 million, or $0.91 per diluted common share compared
to a net loss of $78 million, or $(0.25) per diluted common share
for the first nine months of 2015. Adjusted EBITDA for the three
and nine months ended September 30, 2016, was $1,173 million and
$2,765 million, respectively. Year-to-date cash from operations
totaled $1,733 million.
“Our unique integrated platform delivered another strong quarter
despite a subdued price environment,” said Mauricio Gutierrez,
NRG's President and Chief Executive Officer. “We remain focused on
capital discipline with the retirement of $1 billion of corporate
debt, while opportunistically deploying capital for growth, as
evidenced by the SunEdison transaction. It is the consistent
performance of our generation-retail model that drives our 2016
performance and our 2017 guidance announced today.”
1 Represents $1.312 billion of corporate debt retired, net of $1.25
billion of 2027 Senior Notes issuance, in third quarter 2016, and
completed repurchases of $186 million of Senior Notes due 2018 and
$193 million of Senior Notes due 2021, on October 18, 2016 and
November 3, 2016, respectively. 2 Net of refinanced term loan
interest cost of $16 million. 3 1,384 MW acquired as of November 4,
2016; acquisition of 154 MW construction-ready solar facility in
Texas expected to close in November 2016. 4For comparability, 2015
results have been restated to include the negative contribution
from residential solar of $42 million and $129 million for the
three and nine months ended September 30, 2015.
Segment Results
Table 1: Net Income/(Loss)
($ in millions)
Three Months Ended Nine Months
Ended Segment
9/30/16 9/30/15
9/30/16 9/30/15 Generation $ 630 $ 164
$ 418 $ 213 Retail Mass 2 197 644 523 Renewables 1 11 (16 ) (102 )
(74 ) NRG Yield 1 47 32 111 53 Corporate 2 (297 ) (310 ) (907 )
(793 ) Net Income/(Loss) 3 $ 393 $ 67 $ 164 $
(78 ) 1 In accordance with GAAP, 2015 results have been
restated to include full impact of the assets in the NRG Yield Drop
Down transactions which closed on November 3, 2015, and September
1, 2016. 2 Includes residential solar. 3 Includes mark-to-market
gains and losses of economic hedges.
Table 2: Adjusted EBITDA
($ in millions)
Three Months Ended Nine Months
Ended Segment
9/30/16 9/30/15
9/30/16 9/30/15 Generation 1 $ 605 $
674 $ 1,340 $ 1,525 Retail Mass 266 225 629 606 Renewables 2 84 60
161 132 NRG Yield 2 246 221 692 569 Corporate 3 (28 ) (77 ) (57 )
(247 ) Adjusted EBITDA 4 $ 1,173 $ 1,103 $ 2,765
$ 2,585 1 See Appendices A-6 through A-9 for
Generation regional Reg G reconciliations. 2 In accordance with
GAAP, 2015 results have been restated to include full impact of the
assets in the NRG Yield Drop Down transactions which closed on
November 3, 2015, and September 1, 2016. 3 2016 includes
residential solar. 2015 results have been restated to include
negative contribution of $42 million and $129 million for the three
and nine months ended September 30, 2015, respectively. 4 See
Appendices A-1 through A-4 for Operating Segment Reg G
reconciliations.
Generation: Third quarter Adjusted EBITDA was $605
million, $69 million lower than third quarter 2015 primarily driven
by:
- Gulf Coast Region: $94 million decrease
due primarily to lower realized energy margins in Texas from the
decline in power prices and lower South Central capacity
revenues.
- East Region: $26 million lower due to
lower realized energy margins on lower dispatch and asset sales and
lower capacity prices; partially offset by the partial monetization
of $98 million in 2017-2019 hedges at GenOn and lower operating
costs due to decreased dispatch, reduced outages, deactivations and
plant sales.
- West Region: $44 million increase due
to gain from sale of real property at Potrero site partially offset
by lower capacity prices.
- Business Solutions: $7 million in lower
costs primarily driven by favorable settlement of a Texas sales tax
audit.
Retail Mass: Third quarter Adjusted EBITDA was $266
million, $41 million higher than third quarter 2015 driven by
operating cost efficiencies, lower supply costs and favorable
weather in 2016 compared to 2015.
Renewables: Third quarter Adjusted EBITDA was $84
million, $24 million higher than third quarter 2015 due primarily
to increased generation at Ivanpah.
NRG Yield: Third quarter Adjusted EBITDA was $246
million, $25 million higher than third quarter 2015 primarily due
to higher generation across the wind portfolio.
Corporate: Third quarter Adjusted EBITDA was $(28)
million, $49 million favorable to third quarter 2015 due to reduced
operating expenses at residential solar and favorable trading
results at BETM.
Liquidity and Capital Resources
Table 3: Corporate Liquidity
($ in millions)
9/30/16 12/31/15 Cash at NRG-Level 1
$ 941 $ 693 Revolver 1,374 1,373
NRG-Level Liquidity
$ 2,315 $ 2,066 Restricted cash 480 414
Cash at Non-Guarantor Subsidiaries 1,494 825
Total
Liquidity $ 4,289 $
3,305
1 September 30, 2016, balance includes
$250 million of unrestricted cash held at Midwest Generation (a
non-guarantor subsidiary) which can be distributed to NRG without
limitation.
NRG-Level cash as of September 30, 2016, was $941 million, an
increase of $248 million from the end of 2015, and $1.4 billion was
available under the Company’s credit facilities at the end of the
third quarter 2016. Total liquidity was $4.3 billion, including
restricted cash and cash at non-guarantor subsidiaries (primarily
GenOn and NRG Yield).
NRG Strategic Developments
University of Pittsburgh Medical Center (UPMC) Thermal
Project
On October 31, 2016, subsidiaries of NRG and NRG Yield, Inc.,
entered into an Engineering, Procurement and Construction (EPC)
agreement for the construction of a 73 MWt district energy system
for NRG Yield to provide approximately 150 kpph of steam, 6,750
tons of chilled water and 7.5 MW of emergency backup power service
to UPMC. The initial term of the energy services agreement (under
fixed capacity payments) with UPMC Mercy will be for a period of
twenty years from the service commencement date. Pursuant to the
terms of the EPC agreement, NRG Yield will pay NRG $79 million,
subject to adjustment based upon certain conditions in the EPC
agreement, upon substantial completion of the project. The project
is expected to achieve commercial operations in the first quarter
of 2018.
SunEdison Utility-Scale Solar and Wind Acquisition
On September 15, 2016, the Company entered into an agreement
with SunEdison to acquire (i) an equity interest in a tax-equity
portfolio of 530 MW mechanically-complete solar assets of which
NRG’s net interest based on cash to be distributed will be 265 MW,
and an additional 937 MW of solar and wind assets in development,
(ii) a 154 MW construction-ready solar facility in Texas and (iii)
a 182 MW portfolio of construction-ready and development solar
assets in Hawaii. The acquisition of the portfolio of solar assets
in Hawaii was completed on October 7, 2016, for upfront cash
consideration of $2 million and the acquisition of the 530 MW
tax-equity portfolio and 937 MW of development assets was completed
on November 2, 2016, for upfront cash consideration of $111
million. The Company expects to pay total upfront cash
consideration for the three acquisitions of $129 million, with an
estimated $59 million in additional payments contingent upon future
development milestones.
SunEdison Solar Distributed Generation Acquisition
On October 3, 2016, the Company acquired a 29 MW portfolio of
mechanically-complete and construction-ready distributed generation
solar assets from SunEdison for cash consideration of approximately
$68 million, subject to post-closing adjustments. The Company
expects to sell these assets into a tax-equity financed portfolio
within the distributed generation partnership with NRG Yield.
Drop Down to NRG Yield
On September 1, 2016, NRG completed the previously announced
sale of its 51.05% interest in the CVSR facility to NRG Yield
Operating LLC for total cash consideration of approximately $78.5
million plus assumed debt.
Outlook for 2016 and Initiation of 2017 Guidance
NRG has increased and narrowed the range of its Adjusted EBITDA
and narrowed FCF before growth investments guidance for 2016 and is
also initiating guidance for fiscal year 2017 as set forth
below.
Table 4: 2016 and 2017 Adjusted EBITDA
and FCF before Growth Investments Guidance
2016 2017 ($ in millions)
Prior
Guidance
Narrowed Guidance
Guidance Adjusted EBITDA1 $3,000 – 3,200 $3,250 – 3,350
$2,700 - $2,900 Cash From Operations $2,055 – 2,255 $1,975 – 2,075
$1,355 - $1,555 Free Cash Flow – before Growth Investments $1,000 –
1,200 $1,100 – 1,200 $800 - $1,000
1 Non-GAAP financial measure; see Appendix
Table A-11 for GAAP Reconciliation to Net Income that excludes fair
value adjustments related to derivatives. The Company is unable to
provide guidance for Net Income due to the impact of such fair
value adjustments related to derivatives in a given year.
Capital Allocation Update
In October 2016, the Company redeemed $186 million of
its 7.625% 2018 Senior Notes through a tender offer, at an
average early redemption percentage of 107.75%. On November 3,
2016, the Company redeemed $193 million of its 7.875%
2021 Senior Notes, at a redemption price of 103.94%.
Year-to-date through November 4, 2016, NRG has reduced corporate
debt by $777 million. Combined with the debt repurchases in 2015
and the extension of debt maturities at a lower average coupon
rate, NRG has retired $1.0 billion of corporate debt resulting in
an annual interest savings of approximately $78 million, plus an
additional $10 million in dividend savings from the repurchase of
100% of its outstanding $345 million, 2.822% convertible perpetual
preferred stock for $226 million.
On October 19, 2016, NRG declared a quarterly dividend on the
company's common stock of $0.03 per share, payable November 15,
2016, to stockholders of record as of November 1, 2016,
representing $0.12 on an annualized basis.
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 November 4, 2016, NRG will host a conference call at 8:00
a.m. Eastern to discuss these results. Investors, the news media
and others may access the live webcast of the conference call and
accompanying presentation materials by logging on to NRG’s website
at http://www.nrg.com and clicking on
“Investors.” The webcast will be archived on the site for those
unable to listen in real time.
About NRG
NRG is the leading integrated power company in the U.S., built
on the strength of the nation’s largest and most diverse
competitive electric generation portfolio and leading retail
electricity platform. A Fortune 200 company, NRG creates value
through best in class operations, reliable and efficient electric
generation, and a retail platform serving residential and
commercial customers. Working with electricity customers, large and
small, we continually innovate, embrace and implement sustainable
solutions for producing and managing energy. We aim to be pioneers
in developing smarter energy choices and delivering exceptional
service as our retail electricity providers serve almost 3 million
residential and commercial customers throughout the country. More
information is available at www.nrg.com. Connect with NRG Energy on
Facebook and follow us on Twitter @nrgenergy.
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, including wind
and solar performance, competition in wholesale power markets, the
volatility of energy and fuel prices, failure of customers to
perform under contracts, changes in the wholesale power markets,
changes in government 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, the ability for
GenOn to continue as a going concern, our ability to obtain federal
loan guarantees, the inability to maintain or create successful
partnering relationships with NRG Yield and other third parties,
our ability to operate our businesses efficiently including NRG
Yield, our ability to retain retail customers, our ability to
realize value through our commercial operations strategy and the
creation of NRG Yield, the ability to successfully integrate the
businesses of acquired companies, the ability to realize
anticipated benefits of acquisitions (including expected cost
savings and other synergies) and the ability to sell assets to NRG
Yield, Inc. or the risk that anticipated benefits may take
longer to realize than expected and our ability to pay dividends
and initiate share or debt repurchases under our capital allocation
plan, which may be made from time to time subject to market
conditions and other factors, including as permitted by United
States securities laws. Furthermore, any common stock dividend or
debt repurchases are subject to available capital and market
conditions.
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
November 4, 2016. These estimates are based on assumptions the
company believed to be reasonable as of that date. NRG disclaims
any current intention to update such guidance, except as required
by law. The foregoing review of factors that could cause NRG’s
actual results to differ materially from those contemplated in the
forward-looking statements included in this Earnings press release
should be considered in connection with information regarding risks
and uncertainties that may affect NRG’s future results included in
NRG’s filings with the Securities and Exchange Commission at
www.sec.gov.
NRG ENERGY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three months ended September
30,
Nine months ended September
30,
(In millions,
except for per share amounts)
2016 2015 2016
2015 Operating Revenues Total operating revenues $
3,952 $ 4,434 $ 9,819 $ 11,663
Operating Costs and Expenses Cost of operations 2,793 3,042
6,738 8,551 Depreciation and amortization 357 382 979 1,173
Impairment losses 8 263 123 263 Selling, general and administrative
282 327 802 878 Acquisition-related transaction and integration
costs — 3 7 16 Development activity expenses 23 38 67
109 Total operating costs and expenses 3,463 4,055
8,716 10,990 Gain on sale of assets and postretirement benefits
curtailment, net 266 — 215 14
Operating Income 755 379 1,318 687
Other Income/(Expense) Equity in earnings of
unconsolidated affiliates 16 24 13 29 Impairment loss on investment
(8 ) — (147 ) — Other income, net 9 4 35 27 Loss on debt
extinguishment, net (50 ) (2 ) (119 ) (9 ) Interest expense (280 )
(291 ) (841 ) (855 ) Total other expense (313 ) (265 ) (1,059 )
(808 )
Income/(Loss) Before Income Taxes 442 114 259 (121 )
Income tax expense/(benefit) 49 47 95 (43 )
Net Income/(Loss) 393 67 164 (78 ) Less: Net (loss)/income
attributable to noncontrolling interest and redeemable
noncontrolling interests (9 ) 1 (49 ) (10 )
Net
Income/(Loss) Attributable to NRG Energy, Inc. 402 66 213 (68 )
Gain on redemption, net of dividends for preferred shares —
5 (73 ) 15
Income/(Loss) Available for Common
Stockholders $ 402 $ 61 $ 286 $ (83 )
Earnings/(Loss) per Share Attributable to NRG Energy, Inc.
Common Stockholders Weighted average number of common shares
outstanding — basic 316 331 315 334
Earnings/(Loss) per Weighted
Average Common Share — Basic $ 1.27 $ 0.18 $ 0.91
$ (0.25 ) Weighted average number of common shares
outstanding — diluted 317 332 316 334
Earnings/(Loss) per
Weighted Average Common Share — Diluted $ 1.27 $ 0.18
$ 0.91 $ (0.25 )
Dividends Per Common Share $
0.03 $ 0.15 $ 0.21 $ 0.44
NRG ENERGY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME/(LOSS)
(Unaudited)
Three months ended September
30,
Nine months ended September
30,
2016 2015 2016
2015 (In millions) Net Income/(Loss) $ 393 $
67 $ 164 $ (78 )
Other Comprehensive Income/(Loss), net of
tax Unrealized gains/(losses) on derivatives, net of income tax
(benefit)/expense of $(1), $(12), $1 and $(6) 27 (6 ) (8 ) (2 )
Foreign currency translation adjustments, net of income tax benefit
of $0 , $5, $0 and $6 3 (8 ) 6 (10 ) Available-for-sale securities,
net of income tax expense of $0, $6, $0 and $1 — (7 ) 1 (11 )
Defined benefit plans, net of tax expense of $0, $2, $0 and $6 31
3 32 9 Other comprehensive
income/(loss) 61 (18 ) 31 (14 )
Comprehensive
Income/(Loss) 454 49 195 (92 ) Less: Comprehensive loss
attributable to noncontrolling interest and redeemable
noncontrolling interests (2 ) (17 ) (70 ) (34 )
Comprehensive
Income/(Loss) Attributable to NRG Energy, Inc. 456 66 265 (58 )
Gain on redemption, net of dividends for preferred shares —
5 (73 ) 15
Comprehensive Income/(Loss) Available
for Common Stockholders $ 456 $ 61 $ 338 $
(73 )
NRG ENERGY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30, 2016
December 31, 2015
(In millions,
except shares)
(unaudited) ASSETS Current Assets Cash
and cash equivalents $ 2,435 $ 1,518 Funds deposited by
counterparties 16 106 Restricted cash 480 414 Accounts receivable,
net 1,362 1,157 Inventory 1,017 1,252 Derivative instruments 964
1,915 Cash collateral paid in support of energy risk management
activities 337 568 Renewable energy grant receivable, net 34 13
Current assets held-for-sale — 6 Prepayments and other current
assets 369 442 Total current assets 7,014
7,391
Property, plant and equipment, net 18,203
18,732
Other Assets Equity investments in
affiliates 900 1,045 Notes receivable, less current portion 21 53
Goodwill 999 999
Intangible assets, net
2,106 2,310 Nuclear decommissioning trust fund 605 561 Derivative
instruments 256 305 Deferred income taxes 189 167 Non-current
assets held-for-sale — 105 Other non-current assets 1,198
1,214 Total other assets 6,274 6,759
Total
Assets $ 31,491 $ 32,882
LIABILITIES AND
STOCKHOLDERS’ EQUITY Current Liabilities Current portion
of long-term debt and capital leases $ 1,221 $ 481 Accounts payable
945 869 Derivative instruments 969 1,721 Cash collateral received
in support of energy risk management activities 16 106 Current
liabilities held-for-sale — 2 Accrued expenses and other current
liabilities 1,150 1,196 Total current liabilities
4,301 4,375
Other Liabilities Long-term debt
and capital leases 18,018 18,983 Nuclear decommissioning reserve
284 326 Nuclear decommissioning trust liability 309 283 Deferred
income taxes 47 19 Derivative instruments 475 493 Out-of-market
contracts, net 1,065 1,146 Non-current liabilities held-for-sale —
4 Other non-current liabilities 1,480 1,488 Total
non-current liabilities 21,678 22,742
Total
Liabilities 25,979 27,117
2.822% convertible
perpetual preferred stock — 302
Redeemable noncontrolling
interest in subsidiaries 19 29
Commitments and
Contingencies Stockholders’ Equity Common stock 4 4
Additional paid-in capital 8,370 8,296 Retained deficit (2,791 )
(3,007 ) Less treasury stock, at cost — 102,140,814 and 102,749,908
shares, respectively (2,399 ) (2,413 ) Accumulated other
comprehensive loss (142 ) (173 ) Noncontrolling interest 2,451
2,727
Total Stockholders’ Equity 5,493
5,434
Total Liabilities and Stockholders’ Equity $
31,491 $ 32,882
NRG ENERGY, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Nine months ended September
30,
2016 2015 (In millions) Cash
Flows from Operating Activities Net Income/(Loss) $ 164 $ (78 )
Adjustments to reconcile net income/(loss) to net cash provided by
operating activities: Distributions and equity in earnings of
unconsolidated affiliates 44 28 Depreciation and amortization 979
1,173 Provision for bad debts 36 49 Amortization of nuclear fuel 39
36 Amortization of financing costs and debt discount/premiums 3 (9
) Adjustment to loss on debt extinguishment 21 9 Amortization of
intangibles and out-of-market contracts 73 68 Amortization of
unearned equity compensation 23 37 Impairment losses 270 263
Changes in deferred income taxes and liability for uncertain tax
benefits 29 (72 ) Changes in nuclear decommissioning trust
liability 24 1 Changes in derivative instruments 82 180 Changes in
collateral deposits supporting energy risk management activities
231 (180 ) Proceeds from sale of emission allowances 47 (6 ) Gain
on sale of assets and equity method investments, net and
postretirement benefits curtailment (224 ) (14 ) Cash used by
changes in other working capital (108 ) (93 )
Net Cash Provided
by Operating Activities 1,733 1,392
Cash Flows
from Investing Activities Acquisitions of businesses, net of
cash acquired (18 ) (31 ) Capital expenditures (898 ) (889 )
Increase in restricted cash, net (30 ) (41 ) (Increase)/decrease in
restricted cash to support equity requirements for U.S. DOE funded
projects (36 ) 1 Decrease in notes receivable 2 10 Purchases of
emission allowances (32 ) (40 ) Proceeds from sale of emission
allowances 47 45 Investments in nuclear decommissioning trust fund
securities (378 ) (500 ) Proceeds from the sale of nuclear
decommissioning trust fund securities 354 499 Proceeds from
renewable energy grants and state rebates 11 62 Proceeds from sale
of assets, net of cash disposed of 636 1 Investments in
unconsolidated affiliates (23 ) (357 ) Other 44 8
Net Cash Used by Investing Activities (321 ) (1,232 )
Cash Flows from Financing Activities Payment of dividends to
common and preferred stockholders (66 ) (152 ) Payment for treasury
stock — (353 ) Payment for preferred shares (226 ) — Net receipts
from settlement of acquired derivatives that include financing
elements 129 138 Proceeds from issuance of long-term debt 5,237 679
Payments for short and long-term debt (5,357 ) (954 ) Distributions
from, net of contributions to, noncontrolling interest in
subsidiaries (127 ) 651 Proceeds from issuance of common stock 1 1
Payment of debt issuance costs (70 ) (14 ) Other - contingent
consideration (10 ) (22 )
Net Cash Used by Financing
Activities (489 ) (26 ) Effect of exchange rate changes on cash
and cash equivalents (6 ) 15
Net Increase in Cash and
Cash Equivalents 917 149
Cash and Cash Equivalents at
Beginning of Period 1,518 2,116
Cash and Cash
Equivalents at End of Period $ 2,435 $ 2,265
Appendix Table A-1: Third Quarter 2016
Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the
calculation of Adj. EBITDA and provides a reconciliation to net
income/(loss):
($ in millions) Retail Mass Generation
Renewables Yield Corp/Elim Total
Net
income/(loss) 2 630
11 47
(297 ) 393 Plus: Interest
expense, net — 14 34 70 157 275 Income tax — (2 ) (3 ) 13 41 49
Loss on debt extinguishment — — — — 50 50 Depreciation,
amortization and ARO expense 25 198 48 76 16 363 Amortization of
contracts (1 ) (15 ) — 17
— 1
EBITDA 26
825 90 223 (33 ) 1,131
Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates — 7 2 23 (2 ) 30 Reorganization costs — —
— — 6 6 Deactivation costs — 3 — — 1 4 Gain on sale of business —
(194 ) — — (4 ) (198 ) Other non recurring charges — 6 (6 ) — — —
Impairments — 13 (1 ) — 4 16 Mark to market (MtM) (gains)/losses on
economic hedges 240 (55 ) (1 )
— — 184
Adjusted
EBITDA 266 605
84 246 (28
) 1,173
Third Quarter 2016 condensed financial
information by Operating Segment:
($ in millions)
Retail Mass Generation Renewables
Yield Corp/Elim Total Operating revenues 1,618
2,322 139 289 (325 ) 4,043 Cost of sales 1,156
1,276 1 18 (341 )
2,110
Economic gross margin 462 1,046
138 271 16 1,933 Operations &
maintenance (a) 54 369 19 36 3 481 Selling, marketing, general and
administrative(b) 118 101 12 4 41 276 Other income/(expense)
24 (29 ) 23 (15 )
— 3
Adjusted EBITDA 266
605 84
246 (28 ) 1,173
(a) Excludes deactivation costs of $4 million. (b) Excludes
reorganization costs of $6 million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 3,952 12 79 — — 4,043 Cost of operations
2,218 (3 ) (105 ) —
— 2,110
Gross margin 1,734
15 184 — —
1,933 Operations & maintenance
485 — — (4 ) — 481 Selling, marketing, general & administrative
(a) 282 — — — (6 ) 276 Other expense/(income) (b) 574
(723 ) — — 152
3
Net income 393
738 184 4
(146 ) 1,173 (a)
Other adj. includes reorganization costs of $6 million. (b) Other
adj. includes impairments, loss on sale of business, and
acquisition-related transaction & integration costs.
Appendix Table A-2: Third Quarter 2015
Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss):
($ in millions) Retail Mass Generation
Renewables Yield Corp/Elim Total
Net
income/(loss) 197 164
(16 ) 32
(310 ) 67 Plus: Interest
expense, net — 17 22 70 177 286 Income tax — 2 (4 ) 8 41 47 Loss on
debt extinguishment — — — 2 — 2 Depreciation amortization and ARO
expense 30 231 46 71 17 395 Amortization of contracts (1 )
(11 ) — 14 —
2
EBITDA 226 403 48
197 (75 ) 799 Adjustment to reflect NRG
share of adjusted EBITDA in unconsolidated affiliates — 10 3 20 (4
) 29 Acquisition-related transaction & integration costs — — —
1 2 3 Deactivation costs — 2 — — 2 Gain on sale of business — — (2
) — — (2 ) Other non recurring charges (13 ) 8 6 1 — 2 Impairments
36 222 5 — — 263 MtM (gains)/losses on economic hedges (24 )
29 — 2 —
7
Adjusted EBITDA 225
674 60 221
(77 ) 1,103
Third Quarter 2015 condensed financial
information by Operating Segment:
($ in millions) Retail Mass Generation
Renewables Yield Corp/Elim Total Operating
revenues 1,698 2,692 123 272 (378 ) 4,407 Cost of sales
1,255 1,449 — 20
(364 ) 2,360
Economic gross margin 443
1,243 123 252 (14 ) 2,047
Operations & maintenance (a) 50 384 39 38 (3 ) 508 Selling,
marketing, general & administrative 116 127 16 3 65 327 Other
income/(expense) (b) 52 58 8
(10 ) 1 109
Adjusted
EBITDA 225 674
60 221 (77
) 1,103 (a) Excludes deactivation costs
of $2 million. (b) Excludes acquisition-related transaction &
integration costs of $3 million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 4,434 8 (35 ) — — 4,407 Cost of operations
2,409 (7 ) (42 ) —
— 2,360
Gross margin 2,025
15 7 — — 2,047 Operations &
maintenance 510 — — (2 ) — 508 Selling, marketing, general &
administrative 327 — — — — 327 Other expense/(income) (a)
1,121 (718 ) — —
(294 ) 109
Net income 67
733 7
2 294 1,103 (a)
Other adj. includes impairments and acquisition-related transaction
& integration costs.
Appendix Table A-3: YTD Third Quarter
2016 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the
calculation of Adj. EBITDA and provides a reconciliation to net
income/(loss):
($ in millions) Retail Mass Generation
Renewables Yield Corp/Elim Total
Net
income/(loss) 644 418
(102 ) 111
(907 ) 164 Plus: Interest
expense, net — 56 84 212 478 830 Income tax — (1 ) (14 ) 25 85 95
Loss on debt extinguishment — — — — 119 119 Depreciation,
amortization and ARO expense 80 506 144 226 50 1,006 Amortization
of contracts — (46 ) —
57 (3 ) 8
EBITDA
724 933 112 631 (178 )
2,222 Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates — 23 16 58 (4 ) 93 Acquisition-related
transaction & integration costs — — — — 7 7 Reorganization
costs 5 1 3 — 17 26 Deactivation costs — 15 — — 1 16 (Gain)/loss on
sale of business — (223 ) — — 79 (144 ) Other non recurring charges
— 17 5 3 2 27 Impairments — 226 25 — 19 270 Market to market (MtM)
(gains)/losses on economic hedges (100 ) 348
— — — 248
Adjusted EBITDA 629
1,340 161
692 (57 ) 2,765
YTD Third Quarter 2016 condensed financial
information by Operating Segment:
($ in millions) Retail Mass Generation
Renewables Yield Corp/Elim Total
Operating revenues 3,868 6,131 336 840 (723 ) 10,452 Cost of sales
2,711 3,166 3
48 (796 ) 5,132
Economic gross
margin 1,157 2,965 333 792
73 5,320 Operations & maintenance (a) 164 1,239
96 118 9 1,626 Selling, marketing, general & administrative (b)
299 311 40 10 116 776 Other expense/(income) (c) 65
75 36 (28 ) 5
153
Adjusted EBITDA 629
1,340 161
692 (57 ) 2,765
(a) Excludes deactivation costs of $16 million. (b) Excludes
reorganization costs of $26 million. (c) Excludes
acquisition-related transaction & integration costs of $7
million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 9,819 41 592 — — 10,452 Cost of operations
4,794 (6 ) 344 —
— 5,132
Gross margin
5,025 47 248 — —
5,320 Operations &
maintenance 1,642 — — (16 ) — 1,626 Selling, marketing, general
& administrative(a) 802 — — — (26 ) 776 Other expense/(income)
(b) 2,417 (2,011 ) —
— (253 ) 153
Net income
164 2,058
248 16 279
2,765 (a) Other adj. includes reorganization
costs of $26 million. (b) Other adj. includes impairments,
gain/(loss) on sale of business and acquisition-related transaction
& integration costs.
Appendix Table A-4: YTD Third Quarter
2015 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss):
($ in millions) Retail Mass Generation
Renewables Yield Corp/Elim Total
Net
income/(loss) 523 213
(74 ) 53
(793 ) (78 ) Plus: Interest expense,
net — 52 61 199 532 844 Income tax — 3 (13 ) 8 (41 ) (43 ) Loss on
debt extinguishment — — — 9 — 9 Depreciation amortization and ARO
expense 94 706 134 224 43 1,201 Amortization of contracts
— (41 ) 1 40
1 1
EBITDA 617 933
109 533 (258 ) 1,934 Adjustment
to reflect NRG share of adjusted EBITDA in unconsolidated
affiliates — 22 13 34 (2 ) 67 Acquisition-related transaction &
integration costs 1 — — 2 13 16 Deactivation costs — 8 — — — 8 Gain
on sale of business — — (2 ) — — (2 ) Other non recurring charges
(14 ) 19 5 1 — 11 Impairments 36 222 5 — — 263 MtM (gains)/losses
on economic hedges (34 ) 321 2
(1 ) — 288
Adjusted
EBITDA 606 1,525
132 569
(247 ) 2,585
YTD Third Quarter 2015 condensed financial
information by Operating Segment:
($ in millions) Retail Mass Generation
Renewables Yield Corp/Elim Total
Operating revenues 4,308 7,442 307 768 (969 ) 11,856 Cost of sales
3,136 4,023 6
58 (941 ) 6,282
Economic gross
margin 1,172 3,419 301 710
(28 ) 5,574 Operations & maintenance (a)
165 1,384 96 120 9 1,774 Selling, marketing, general &
administrative 306 343 37 9 183 878 Other expense/(income) (b)
95 167 36
12 27 337
Adjusted EBITDA
606 1,525
132 569 (247
) 2,585 (a) Excludes deactivation costs
of $8 million. (b) Excludes acquisition-related transaction &
integration costs of $16 million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 11,663 28 165 — — 11,856 Cost of operations
6,416 (11 ) (123 ) —
— 6,282
Gross margin
5,247 39 288 — —
5,574 Operations &
maintenance 1,782 — — (8 ) — 1,774 Selling, marketing, general
& administrative 878 — — — — 878 Other expense/(income) (a)
2,665 (1,974 ) — —
(354 ) 337
Net loss
(78 ) 2,013 288
8 354
2,585 (a) Other adj. includes impairments and
acquisition-related transaction & integration costs.
Appendix Table A-5: 2016 and 2015 QTD
and YTD Third 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 ($ in millions)
September 30, 2016 September 30, 2015
Net Cash Provided by Operating Activities 860
934 Reclassifying of net receipts for settlement of
acquired derivatives that include financing elements 26 47 Sale of
Potrero Land 74 — Merger, integration and cost-to-achieve expenses
(1) 22 1 Return of capital from equity investments (5 ) —
Adjustment for change in collateral 119
68
Adjusted Cash Flow from Operating
Activities 1,096
1,050 Maintenance CapEx, net (2) (103 ) (125 )
Environmental CapEx, net (48 ) (30 ) Preferred dividends — (2 )
Distributions to non-controlling interests (34 )
(32 )
Free Cash Flow - before Growth
Investments 911
861 (1) Cost-to-achieve expenses associated
with the $150 million savings announced on September 2015 call. (2)
Includes insurance proceeds of $2 million in 2016; excludes merger
and integration capex of $2 million in 2015.
Nine Months Ended ($ in millions)
September
30, 2016 September 30, 2015 Net Cash
Provided by Operating Activities 1,733
1,392 Reclassifying of net receipts for settlement of
acquired derivatives that include financing elements 129 138 Sale
of Potrero Land 74 — Merger, integration and cost-to-achieve
expenses (1) 47 18 Return of capital from equity investments 6 —
Adjustment for change in collateral (231)
180
Adjusted Cash Flow from Operating
Activities 1,758
1,728 Maintenance CapEx, net (2) (272) (314 )
Environmental CapEx, net (237) (157 ) Preferred dividends (2) (7 )
Distributions to non-controlling interests (116)
(115 )
Free Cash Flow - before Growth
Investments 1,131
1,135 (1) Cost-to-achieve expenses associated
with the $150 million savings announced on September 2015 call. (2)
Includes insurance proceeds of $33 million in 2016; excludes merger
and integration capex of $11 million in 2015.
Appendix Table A-6: Third Quarter 2016
Regional Adjusted EBITDA Reconciliation for Generation
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
(loss)/income:
($ in millions) East Gulf Coast West
BusinessSolutions
Total
Net income/(loss) 385
216 110 (81
) 630 Plus: Interest expense, net 14 —
— — 14 Income tax — (2 ) — — (2 ) Depreciation, amortization and
ARO expense 50 127 20 1 198 Amortization of contracts (17 )
1 — 1 (15 )
EBITDA 432 342 130 (79 )
825 Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates — — 2 5 7 Deactivation costs 2 — 1 — 3
Gain on sale of assets (188 ) — (6 ) — (194 ) Other non recurring
charges — 6 — — 6 Impairments 1 13 (1 ) — 13 Market to market (MtM)
losses/(gains) on economic hedges 38 (207 )
(3 ) 117 (55 )
Adjusted EBITDA
285 154 123
43 605
Third Quarter 2016 condensed financial
information for Generation:
($ in millions) East Gulf Coast West
BusinessSolutions
Elims. Total Operating revenues 1,002 804 147 394 (25
) 2,322 Cost of sales 452 454 60
331 (21 ) 1,276
Economic gross margin 550 350 87
63 (4 ) 1,046 Operations &
maintenance (a) 188 143 33 5 — 369 Selling, marketing, general
& administrative 43 31 7 20 — 101 Other expense/(income)
34 22 (76 ) (5 ) (4 )
(29 )
Adjusted EBITDA 285
154 123 43
—
605 (a) Excludes
deactivation costs of $3 million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 2,390 (4 ) (64 ) — — 2,322 Cost of operations
1,287 (2 ) (9 ) —
— 1,276
Gross margin 1,103
(2 ) (55 ) — —
1,046 Operations
& maintenance 372 — — (3 ) — 369 Selling, marketing, general
& administrative 101 — — — — 101 Other expense/(income) (a)
- (197 ) — —
168 (29 )
Net income 630
195 (55 )
3 (168 ) 605
(a) Other adj. includes impairments and
acquisition-related transaction & integration costs.
Appendix Table A-7: Third Quarter 2015
Regional Adjusted EBITDA Reconciliation for Generation
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss):
($ in millions) East Gulf Coast West
BusinessSolutions
Total
Net (loss)/income (12 )
124 63 (11
) 164 Plus: Interest expense, net 17 —
— — 17 Income tax — — — 2 2 Depreciation amortization and ARO
expense 68 143 17 3 231 Amortization of contracts (18 )
1 4 2 (11 )
EBITDA 55 268 84 (4 )
403 Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates — 4 3 3 10 Deactivation costs 2 — — — 2
Other non recurring charges 1 7 — — 8 Impairments 222 — — — 222 MtM
(gains)/losses on economic hedges 31 (31 )
(8 ) 37 29
Adjusted
EBITDA 311 248
79 36 674
Third Quarter 2015 condensed financial
information for Generation:
($ in millions) East Gulf Coast West
BusinessSolutions
Elims. Total Operating revenues 1,143 905 201 446 (3
) 2,692 Cost of sales 515 465 90
379 — 1,449
Economic
gross margin 628 440 111 67
(3 ) 1,243 Operations & maintenance (a)
221 128 29 6 — 384 Selling, marketing, general & administrative
53 41 11 22 — 127 Other expense/(income) 43 23
(8 ) 3 (3 ) 58
Adjusted EBITDA 311 248
79 36
— 674 (a) Excludes deactivation
costs of $2 million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 2,695 (4 ) 1 — — 2,692 Cost of operations
1,484 (7 ) (28 ) — —
1,449
Gross margin 1,211 3
29 — —
1,243 Operations & maintenance 386 — — (2
) — 384 Selling, marketing, general & administrative 127 — — —
— 127 Other expense/(income) (a) 534 (236 )
— — (240 ) 58
Net
income 164 239
29 2 240
674 (a) Other adj. includes impairments.
Appendix Table A-8: YTD Third Quarter
2016 Regional Adjusted EBITDA Reconciliation for Generation
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
income/ (loss)
($ in millions) East Gulf Coast
West
BusinessSolutions
Total
Net income/(loss) 493
(246 ) 73
98 418 Plus: Interest expense,
net 56 1 — (1 ) 56 Income tax — (2 ) — 1 (1 ) Depreciation,
amortization and ARO expense 162 281 55 8 506 Amortization of
contracts (52 ) 4 (3 ) 5
(46 )
EBITDA 659 38 125
111 933 Adjustment to reflect NRG share of adjusted
EBITDA in unconsolidated affiliates — 5 7 11 23 Reorganization
costs — — — 1 1 Deactivation costs 15 — — — 15 Gain on sale of
assets (217 ) — (6 ) — (223 ) Other non recurring charges 3 14 — —
17 Impairments 17 151 58 — 226 Market to market (MtM)
losses/(gains) on economic hedges 175
208 15 (50 ) 348
Adjusted EBITDA 652
416 199 73
1,340
Third YTD Quarter 2016 condensed financial
information for Generation:
($ in millions) East Gulf Coast West
BusinessSolutions
Elims. Total Operating revenues 2,662 2,089 358 1,055
(33 ) 6,131 Cost of sales 1,070 1,082
111 924 (21 ) 3,166
Economic gross margin 1,592 1,007 247
131 (12 ) 2,965 Operations &
maintenance (a) 698 429 95 17 — 1,239 Selling, marketing, general
& administrative (b) 133 98 24 56 — 311 Other expense/(income)
109 64 (71 ) (15 )
(12 ) 75
Adjusted EBITDA 652
416 199 73
— 1,340 (a)
Excludes deactivation costs of $15 million. (b) Excludes
reorganization costs of $1 million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 5,599 (11 ) 543 — — 6,131 Cost of operations
2,973 (2 ) 195 —
— 3,166
Gross Margin
2,626 (9 ) 348 — —
2,965 Operations & maintenance 1,254 — — (15 ) — 1,239
Selling, marketing, general & administrative 312 — — — (1 ) 311
Other expense/(income) (a) 642 (524 )
— — (43 ) 75
Net
loss 418 515
348 15 44
1,340 (a) Other adj. includes
impairments and acquisition-related transaction & integration
costs.
Appendix Table A-9: YTD Third Quarter
2015 Regional Adjusted EBITDA Reconciliation for Generation
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to net
income/(loss)
($ in millions) East Gulf Coast West
BusinessSolutions
Total
Net income/(loss) 181
49 30 (47
) 213 Plus: Interest expense, net 52 —
— — 52 Income tax — — — 3 3 Depreciation amortization and ARO
expense 220 431 46 9 706 Amortization of contracts (50 )
3 1 5 (41 )
EBITDA 403 483 77 (30 )
933 Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates — 5 6 11 22 Deactivation costs 5 — 3 — 8
Other non recurring charges 2 17 — — 19 Impairments 222 — — — 222
MtM losses on economic hedges 253 (20 )
5 83 321
Adjusted EBITDA
885 485 91
64 1,525
Third YTD Quarter 2015 condensed financial
information for Generation:
($ in millions) East Gulf Coast
West
BusinessSolutions
Elims. Total Operating revenues 3,518 2,386 366 1,182
(10 ) 7,442 Cost of sales 1,601 1,236
142 1,044 —
4,023
Economic gross margin 1,917 1,150
224 138 (10 ) 3,419 Operations
& maintenance (a) 776 488 102 18 — 1,384 Selling, marketing,
general & administrative 141 114 30 58 — 343 Other
expense/(income) 115 63 1
(2 ) (10 ) 167
Adjusted EBITDA
885 485
91 64 —
1,525 (a) Excludes deactivation costs of $8
million.
The following table reconciles the
condensed financial information to Adjusted EBITDA:
($ in millions)
Condensedfinancialinformation
Interest, tax,depr., amort.
MtM Deactivation Other adj.
AdjustedEBITDA
Operating revenues 7,325 (12 ) 129 — — 7,442 Cost of operations
4,225 (10 ) (192 ) —
— 4,023
Gross margin 3,100
(2 ) 321 — — 3,419
Operations & maintenance 1,392 — — (8 ) — 1,384 Selling,
marketing, general & administrative 343 — — — — 343 Other
expense/(income) (a) 1,152 (721 ) —
— (264 ) 167
Net income
213 719 321
8 264
1,525 (a) Other adj. includes impairments and
acquisition-related transaction & integration costs.
Appendix Table A-10: YTD Third Quarter
2016 Sources and Uses of Liquidity
The following table summarizes the sources
and uses of liquidity in the first nine months of 2016:
($ in millions)
Nine Months Ended
September 30, 2016
Sources: Adjusted cash flow from operations 1,758 Asset
sales 562 Issuance of NRG Yield Senior Notes due 2026 350
Monetization of capacity revenues at Midwest Gen 253 Collateral 231
Issuance of CVSR HoldCo debt 200 Capistrano debt proceeds, net of
debt repayment 108 Tax Equity Proceeds 11 Increase in credit
facility 1
Uses: Maintenance and environmental
capex, net (1) (509 ) Debt repayments, discretionary, net of
proceeds (corporate-level) (380 ) Debt repayments,
non-discretionary (363 ) Growth investments and acquisitions, net
(312 ) Proceeds from NRG Yield revolver, net of payments (306 )
Redemption of convertible preferred stock (226 ) Distributions to
non-controlling interests (116 ) Capistrano distribution of debt
proceeds to non-controlling interests (87 ) Debt Issuance Costs (70
) Common and Preferred Stock Dividends (66 ) Merger, integration
and cost-to-achieve expenses (2) (47 ) Other Investing and
Financing (8 )
Change in Total Liquidity
984 (1) Includes insurance proceeds of $33
million. (2) Cost-to-achieve expenses associated with the $150
million savings announced on September 2015 call.
Appendix Table A-11: 2016 and 2017
Adjusted EBITDA Guidance Reconciliation
The following table summarizes the
calculation of Adjusted EBITDA providing reconciliation to net
income:
2016 Adjusted EBITDA
Prior Guidance
($ in millions)
Low High GAAP Net
Income 1 180 380 Income Tax 100 100 Interest Expense & Debt
Extinguishment Costs 1,185 1,185 Depreciation, Amortization,
Contract Amortization and ARO Expense 1,445 1,445 Adjustment to
reflect NRG share of adjusted EBITDA in unconsolidated affiliates
45 45 Other Costs 2 45 45
Adjusted EBITDA
3,000 3,200 2016 Adjusted
EBITDA
Revised Guidance
($ in millions)
Low High GAAP Net
Income 1 235 335 Income Tax 100 100 Interest Expense & Debt
Extinguishment Costs 1,228 1,228 Depreciation, Amortization,
Contract Amortization and ARO Expense 1,352 1,352 Adjustment to
reflect NRG share of adjusted EBITDA in unconsolidated affiliates
115 115 Other Costs 2 220 220
Adjusted EBITDA
3,250 3,350 2017 Adjusted
EBITDA ($ in millions)
Low High
GAAP Net Income 1 60 260 Income Tax 80 80 Interest Expense &
Debt Extinguishment Costs 1,155 1,155 Depreciation, Amortization,
Contract Amortization and ARO Expense 1,235 1,235 Adjustment to
reflect NRG share of adjusted EBITDA in unconsolidated affiliates
110 110 Other Costs 2 60 60
Adjusted EBITDA
2,700 2,900 (1) For purposes of guidance, fair
value adjustments related to derivatives are assumed to be zero.
(2) Includes deactivation costs, gain on sale of businesses,
reorganization costs, asset write-offs, impairments and other
non-recurring charges
Appendix Table A-12: 2016 and 2017
FCFbG Guidance Reconciliation
The following table summarizes the
calculation of Free Cash Flow before Growth providing
reconciliation to Cash from Operations:
2016 2017 ($ in millions)
Prior Guidance
Narrowed Guidance
Guidance Adjusted EBITDA $3,000 – 3,200 $3,250 – 3,350
$2,700 - $2,900 Cash Interest payments (1,090) (1,115) (1,065) Debt
Extinguishment Cash Cost (100) (120) 0 Cash Income tax (40) (40)
(40) Collateral / working capital / other 285 0 (240) Cash From
Operations $2,055 – 2,255 $1,975 – 2,075 $1,355 - $1,555
Adjustments: Acquired Derivatives, Cost-to-Achieve, Return of
Capital Dividends, Collateral and Other (210) 25 0 Adjusted Cash
flow from operations $1,845 – 2,045 $2,000 – 2,100 $1,355 - $1,555
Maintenance capital expenditures, net (435) – (465) (435) – (450)
(310) - (340) Environmental capital expenditures, net (285) – (315)
(280) – (290) (10) - (30) Preferred dividends (2) (2) 0
Distributions to non-controlling interests (170) – (180) (160) –
(170) (185) - (205) Free Cash Flow – before Growth Investments
$1,000 – 1,200 $1,100 – 1,200 $800 - $1,000
EBITDA and Adjusted EBITDA are non-GAAP financial measures.
These measurements are not recognized in accordance with GAAP and
should not be viewed as an alternative to GAAP measures of
performance. The presentation of Adjusted EBITDA should not be
construed as an inference that NRG’s future results will be
unaffected by unusual or non-recurring items.
EBITDA represents net income before interest (including loss on
debt extinguishment), taxes, depreciation and amortization. EBITDA
is presented because NRG considers it an important supplemental
measure of its performance and believes debt-holders frequently use
EBITDA to analyze operating performance and debt service capacity.
EBITDA has limitations as an analytical tool, and you should not
consider it in isolation, or as a substitute for analysis of our
operating results as reported under GAAP. Some of these limitations
are:
- EBITDA does not reflect cash
expenditures, or future requirements for capital expenditures, or
contractual commitments;
- EBITDA does not reflect changes in, or
cash requirements for, working capital needs;
- EBITDA does not reflect the significant
interest expense, or the cash requirements necessary to service
interest or principal payments, on debt or cash income tax
payments;
- Although depreciation and amortization
are non-cash charges, the assets being depreciated and amortized
will often have to be replaced in the future, and EBITDA does not
reflect any cash requirements for such replacements; and
- Other companies in this industry may
calculate EBITDA differently than NRG does, limiting its usefulness
as a comparative measure.
Because of these limitations, EBITDA should not be considered as
a measure of discretionary cash available to use to invest in the
growth of NRG’s business. NRG compensates for these limitations by
relying primarily on our GAAP results and using EBITDA and Adjusted
EBITDA only supplementally. See the statements of cash flow
included in the financial statements that are a part of this news
release.
Adjusted EBITDA is presented as a further supplemental measure
of operating performance. As NRG defines it, Adjusted EBITDA
represents EBITDA excluding impairment losses, gains or losses on
sales, dispositions or retirements of assets, any mark-to-market
gains or losses from accounting for derivatives, adjustments to
exclude the Adjusted EBITDA related to the non-controlling
interest, gains or losses on the repurchase, modification or
extinguishment of debt, the impact of restructuring and any
extraordinary, unusual or non-recurring items plus adjustments to
reflect the Adjusted EBITDA from our unconsolidated investments.
The reader is encouraged to evaluate each adjustment and the
reasons NRG considers it appropriate for supplemental analysis. As
an analytical tool, Adjusted EBITDA is subject to all of the
limitations applicable to EBITDA. In addition, in evaluating
Adjusted EBITDA, the reader should be aware that in the future NRG
may incur expenses similar to the adjustments in this news
release.
Management believes Adjusted EBITDA is useful to investors and
other users of NRG's financial statements in evaluating its
operating performance because it provides an additional tool to
compare business performance across companies and across periods
and adjusts for items that we do not consider indicative of NRG’s
future operating performance. This measure is widely used by
debt-holders to analyze operating performance and debt service
capacity and by equity investors to measure our operating
performance without regard to items such as interest expense,
taxes, depreciation and amortization, which can vary substantially
from company to company depending upon accounting methods and book
value of assets, capital structure and the method by which assets
were acquired. Management uses Adjusted EBITDA as a measure of
operating performance to assist in comparing performance from
period to period on a consistent basis and to readily view
operating trends, as a measure for planning and forecasting overall
expectations, and for evaluating actual results against such
expectations, and in communications with NRG's Board of Directors,
shareholders, creditors, analysts and investors concerning its
financial performance.
Adjusted cash flow from operating activities is a non-GAAP
measure NRG provides to show cash from operations with the
reclassification of net payments of derivative contracts acquired
in business combinations from financing to operating cash flow, as
well as the add back of merger, integration and related
restructuring costs. The Company provides the reader with this
alternative view of operating cash flow because the cash settlement
of these derivative contracts materially impact operating revenues
and cost of sales, while GAAP requires NRG to treat them as if
there was a financing activity associated with the contracts as of
the acquisition dates. The Company adds back merger, integration
related restructuring costs as they are one time and unique in
nature and do not reflect ongoing cash from operations and they are
fully disclosed to investors.
Free cash flow (before Growth investments) is adjusted cash flow
from operations less maintenance and environmental capital
expenditures, net of funding, preferred stock dividends and
distributions to non-controlling interests and is used by NRG
predominantly as a forecasting tool to estimate cash available for
debt reduction and other capital allocation alternatives. The
reader is encouraged to evaluate each of these adjustments and the
reasons NRG considers them appropriate for supplemental analysis.
Because we have mandatory debt service requirements (and other
non-discretionary expenditures) investors should not rely on free
cash flow before Growth investments as a measure of cash available
for discretionary expenditures.
Free Cash Flow before Growth Investment is utilized by
Management in making decisions regarding the allocation of capital.
Free Cash Flow before Growth Investment is presented because the
Company believes it is a useful tool for assessing the financial
performance in the current period. In addition, NRG’s peers
evaluate cash available for allocation in a similar manner and
accordingly, it is a meaningful indicator for investors to
benchmark NRG's performance against its peers. Free Cash Flow
before Growth Investment is a performance measure and is not
intended to represent net income (loss), cash from operations (the
most directly comparable U.S. GAAP measure), or liquidity and is
not necessarily comparable to similarly titled measures reported by
other companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161104005309/en/
NRG Energy, Inc.Media:Karen Cleeve, 609-524-4608orMarijke
Shugrue, 609-524-5262orInvestors:Kevin L. Cole, ,
609-524-4526CFAorLindsey Puchyr, 609-524-4527
NRG Energy (NYSE:NRG)
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From Apr 2024 to May 2024
NRG Energy (NYSE:NRG)
Historical Stock Chart
From May 2023 to May 2024