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NRG Energy, Inc. Reports Full Year and Fourth Quarter Results, Reaffirms 2015 Guidance
2014 Results and Financial Highlights
-
$3,128 million of Adjusted EBITDA, including$2,134 million delivered by NRG Business and NRG Renew,$604 million by NRG Home Retail,$455 million byNRG Yield , and$65 million of negative contribution from investment in NRG Home Solar -
$951 million of Free Cash Flow (FCF) before growth investments for full-year 2014 -
$830 million of capital replenished at NRG following dropdowns toNRG Yield announced in 2014
Business and Operational Highlights
-
$3.5 billion Edison Mission Energy (EME) acquisition now fully integrated -
Over 1 GW of new long-term contracts awarded in
California -
1.6 million tons/year carbon expected to be captured from
Petra Nova WA Parish CCS-EOR project now under construction - 627,000 increase in NRG Home Retail recurring customer count
- 13,390 aggregate new NRG Home Solar lease customers at year end (projecting 35,000-40,000 aggregate by year end 2015)
-
947 MW Alta Wind facility acquired by
NRG Yield for$870 million 1 -
PH
Robinson (360 MW2) peaking plant under construction inHouston (approximately$400 /kw installed cost) -
Up to 70 MW of distributed generation to be installed at up to 170
sites through a recently announced deal with
Kaiser Permanente
2015 Financial Guidance and Capital Allocation
-
2015 Guidance is reaffirmed as follows:
-
Adjusted EBITDA of
$3,200-$3,400 million 3 -
FCF before growth investments of
$1,100-$1,300 million 3
-
Adjusted EBITDA of
-
2015 Capital Allocation:
-
4% increase in NRG common stock dividend to
$0.58 per share annually -
Proposed recapitalization of
NRG Yield through the creation of new classes of stock permitting more efficient means to raise capital to fund growth
-
4% increase in NRG common stock dividend to
“Through outstanding execution across all our businesses, NRG withstood
the headwinds of a mild summer and declining commodity price environment
to post strong financial results in 2014 and positioned ourselves well
for growth in 2015,” said
Segment Results
The results of the company have been restated in order to reflect the
reorganization of NRG’s existing businesses on the basis of their key
target customer segments. NRG reorganized in 2014 to better serve energy
consumers with the choice of energy solutions and services that each
segment demands: NRG Business, NRG Home (including NRG Home Retail and
NRG Home Solar), NRG Renew, and
Table 1: Adjusted EBITDA |
|||||||||
($ millions) | Three Months Ended | Twelve Months Ended | |||||||
Segment | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||
Business (1)(2) | 323 | 386 | 1,898 | 1,758 | |||||
Home Retail | 165 | 180 | 604 | 528 | |||||
Home Solar | (34) | (2) | (65) | (5) | |||||
Renew (1) | 55 | 18 | 237 | 101 | |||||
NRG Yield (1) | 114 | 93 | 455 | 293 | |||||
Corporate | 4 | (6) | (1) | (39) | |||||
Adjusted EBITDA (3) |
627 | 669 | 3,128 | 2,636 |
(1) In accordance with GAAP, 2014 and 2013 results have been
restated to include full impact of the assets in the ROFO dropdown
transaction which closed on
(2) See Appendices A-9 thru A-10 for Business regional segments Reg G reconciliations
(3) Detailed adjustments by business segment are shown in Appendix A
Table 2: Net Income / (Loss) |
|||||||||
($ millions) | Three Months Ended | Twelve Months Ended | |||||||
Segment | 12/31/14 | 12/31/13 | 12/31/14 | 12/31/13 | |||||
Business (1)(2) | 575 | (452) | 1,094 | (51) | |||||
Home Retail (3) | (99) | 225 | 138 | 349 | |||||
Home Solar | (18) | (4) | (53) | (9) | |||||
Renew (1) | (64) | (16) | (163) | (71) | |||||
NRG Yield (1) | (10) | 33 | 65 | 119 | |||||
Corporate | (265) | (83) | (947) | (723) | |||||
Net Income/ (Loss) | 119 | (297) | 134 | (386) |
(1) In accordance with GAAP, 2014 and 2013 results have been
restated to include full impact of the assets in the ROFO drop-down
transaction which closed on
(2) See Appendices A-9 thru A-12 for Business regional segments net income/(loss)
(3) Includes mark-to-market gains and losses of economic hedges
NRG Business: Full Year 2014 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
NRG Home Retail: Full Year 2014 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
NRG Home Solar: Full Year 2014 Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
NRG Renew: Full Year Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Fourth quarter Adjusted EBITDA was
Liquidity and Capital Resources
Table 3: Corporate Liquidity |
||||
($ in millions) | 12/31/14 | 12/31/13 | ||
Cash and Cash Equivalents | 2,116 | 2,254 | ||
Restricted cash | 457 | 268 | ||
Total | 2,573 | 2,522 | ||
NRG Corporate Credit Facility Availability | 1,367 | 1,173 | ||
Total Liquidity | 3,940 | 3,695 |
Total liquidity as of
-
$4,765 million of cash outflows throughDecember 2014 , consisting of:-
$2,944 million for acquisitions and growth projects, net, including$1,596 million net cash used in the EME transaction onApril 1, 2014 and$901 million net cash used to acquire Alta Wind onAugust 12, 2014 ; -
$853 million of cash grant bridge loan payments; -
$508 million of maintenance and environmental capital expenditures, net; -
$190 million common and preferred stock dividends; -
$124 million of merger and integration expenses and capital costs; -
$102 million of other investing and financing activities; and -
$44 million of stock repurchases.
-
-
Offset by
$4,816 million of cash inflows throughDecember 2014 , consisting of:-
$1,838 million of net financing activities consisting of:$2,100 million of proceeds from senior note debt issuance;$337 million of proceeds fromNRG Yield convertible note issuance;$492 million of proceeds fromNRG Yield “Green Bond” issuance;$630 million of proceeds from NRG Yield Class A equity issuance, partially offset by$1,721 million of debt payments; -
$1,525 million of Adjusted Cash Flow from Operations; -
$916 million of cash grant proceeds; -
$190 million of net proceeds from tax-equity financing ofNRG Yield -eligible wind assets acquired as a part of the EME transaction; -
$131 million of net proceeds from sale of assets; -
$127 million of other project debt; and -
$89 million of collateral received.
-
Completed Sale of Second Set of Assets to
On
This transaction represents a projected
NRG Strategic Developments
NRG Business
NRG continued its strong track record of safety performance with a top quartile recordable rate of 0.73 for the full year 2014.
Overall generation was up 4% over 2013, including the delivery of exceptional operating performance during the extreme cold weather in the first quarter of 2014, with fleet peak availability of 90.7%.
NRG Business’s multi-year capital investment program includes both
generation additions and fuel conversions of approximately 4,400 MWs of
generation capacity across our geographic footprint. This provides the
company with the ability to bid generation assets in regional forward
capacity markets while also meeting key environmental compliance goals.
Assets undergoing planned fuel conversions or additions include
NRG was selected by Southern California Edison (SCE) to repower the
Company’s Mandalay facility in
NRG has begun construction of a 360 MW4, natural gas-fired
peaking plant at our PH Robinson site near
NRG Home
As a result of organic growth and acquisitions completed in 2014, NRG Home Solar now has the capabilities it needs to compete at the national level in 2015. By the end of 2015, NRG Home Solar expects to have 35,000-40,000 lease customers totaling approximately 245–280 MW, of which 25,000-30,000 are expected to be added during the year 2015.
NRG acquired Goal Zero, a leader in portable solar and energy storage products, which the Company expects to enable it to meet its retail customer’s growing demand for power “on the go.”
In the first quarter 2015, NRG offered
NRG also expects to propose a similar partnership with
In connection with the recapitalization, the operating agreement of
The recapitalization is intended to provide
NRG Renew
NRG Renew entered into an agreement with
Outlook for 2015
The Company is reaffirming its guidance range for fiscal year 2015 with respect to both Adjusted EBITDA and FCF before growth investments. As always, the Company’s annual guidance assumes normalized weather.
Table 4: 2015 Adjusted EBITDA and FCF before Growth investments Guidance
2015 | ||
($ in millions) | Guidance | |
Adjusted EBITDA1 | $3,200–3,400 | |
Interest payments | (1,160) | |
Income tax | (40) | |
Working capital/other changes | 250 | |
Adjusted Cash flow from operations | $2,250–2,450 | |
Maintenance capital expenditures, net | (480)–(510) | |
Environmental capital expenditures, net | (330)–(360) | |
Adjusted EBITDA from NRG Home Solar | (100) | |
Preferred dividends | (10) | |
Distributions to non-controlling interests | (190)–(210) | |
Free cash flow – before Growth investments | $1,100–1,300 |
1 2015 guidance excludes expected negative contribution of
2015 Capital Allocation Update
On
NRG has also completed the
The Company's common stock dividend and share buyback program are subject to available capital, market conditions and compliance with associated laws and regulations.
Announcing Transition in NRG’s Investor Relations Department
NRG is announcing that
Earnings Conference Call
NRG will host a conference call at
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 250 company, we create value through reliable and
efficient conventional generation while driving innovation in solar and
renewable power, electric vehicle ecosystems, carbon capture technology
and customer-centric energy solutions. Our retail electricity providers
serve almost 3 million residential and commercial customers throughout
the country. More information is available at www.nrg.com.
Connect with
Safe Harbor Disclosure
In addition to historical information, the information presented in this communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks and uncertainties and can typically be identified by terminology such as “may,” “should,” “could,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “expect,” “intend,” “seek,” “plan,” “think,” “anticipate,” “estimate,” “predict,” “target,” “potential” or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements include, but are not limited to, statements about the Company’s future revenues, income, indebtedness, capital structure, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.
Although NRG believes that its expectations are reasonable, it can give
no assurance that these expectations will prove to 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, the condition of capital markets
generally, our ability to access capital markets, unanticipated outages
at our generation facilities, adverse results in current and future
litigation, failure to identify, execute, or successfully implement
acquisitions 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, except as required by law. The Adjusted EBITDA and free cash
flow guidance are estimates as of
1 Excludes
2 Represents average annual peaking capacity
3 Excludes projected negative contribution of
4 Represents average annual peaking capacity
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
For the Year Ended December 31, | ||||||||||||
(In millions, except per share amounts) | 2014 | 2013 | 2012 | |||||||||
Operating Revenues | ||||||||||||
Total operating revenues | $ | 15,868 | $ | 11,295 | $ | 8,422 | ||||||
Cost of operations | 11,779 | 8,121 | 6,140 | |||||||||
Depreciation and amortization | 1,523 | 1,256 | 950 | |||||||||
Impairment losses | 97 | 459 |
- |
|||||||||
Selling, general and administrative | 1,042 | 904 | 807 | |||||||||
Acquisition-related transaction and integration costs | 84 | 128 | 107 | |||||||||
Development activity expenses | 91 | 84 | 68 | |||||||||
Total operating costs and expenses | 14,616 | 10,952 | 8,072 | |||||||||
Gain on sale of assets | 19 |
- |
- |
|||||||||
Operating Income | 1,271 | 343 | 350 | |||||||||
Other Income/(Expense) | ||||||||||||
Equity in earnings of unconsolidated affiliates | 38 | 7 | 37 | |||||||||
Bargain purchase gain related to GenOn acquisition |
- |
- |
296 | |||||||||
Impairment losses on investments |
- |
(99 | ) | (2 | ) | |||||||
Other income, net | 22 | 13 | 19 | |||||||||
Gain on sale of equity-method investment | 18 |
- |
- |
|||||||||
Loss on debt extinguishment | (95 | ) | (50 | ) | (51 | ) | ||||||
Interest expense | (1,119 | ) | (848 | ) | (661 | ) | ||||||
Total other expense | (1,136 | ) | (977 | ) | (362 | ) | ||||||
Income/(Loss)Before Income Taxes | 135 | (634 | ) | (12 | ) | |||||||
Income tax expense/(benefit) | 3 | (282 | ) | (327 | ) | |||||||
Net Income/(Loss) | 132 | (352 | ) | 315 | ||||||||
Less: Net (loss)/income attributable to noncontrolling interests and redeemable noncontrolling interests | (2 | ) | 34 | 20 | ||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. | 134 | (386 | ) | 295 | ||||||||
Dividends for preferred shares | 56 | 9 | 9 | |||||||||
Income/(Loss) Available for Common Stockholders | $ | 78 | $ | (395 | ) | $ | 286 | |||||
Earnings/(Loss) Per Share Attributable to NRG Energy, Inc. Common Stockholders | ||||||||||||
Weighted average number of common shares outstanding - basic |
334 | 323 | 232 | |||||||||
Net Income/(Loss) per Weighted Average Common Share - Basic |
$ | 0.23 | $ | (1.22 | ) | $ | 1.23 | |||||
Weighted average number of common shares outstanding - diluted |
339 | 323 | 234 | |||||||||
Net Income/(Loss) per Weighted Average Common Share - Diluted |
$ | 0.23 | $ | (1.22 | ) | $ | 1.22 | |||||
Dividends Per Common Share | $ | 0.54 | $ | 0.45 | $ | 0.18 | ||||||
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Net Income/(Loss) | $ | 132 | $ | (352 | ) | $ | 315 | |||||
Other Comprehensive (Loss)/Income, net of tax | ||||||||||||
Unrealized (loss)/gain on derivatives, net of income tax benefit of $21, $6, and $94 | (45 | ) | 8 | (163 | ) | |||||||
Foreign currency translation adjustments, net of income tax benefit of $5, $14, and $1 | (8 | ) | (24 | ) | (1 | ) | ||||||
Reclassification adjustment for translation gain realized upon sale of Schkopau, net of income tax benefit of $0, $0, and $6 |
- |
- |
(11 | ) | ||||||||
Available-for-sale securities, net of income tax benefit/(expense) of $2, $(2), and $(1) | (7 | ) | 3 | 3 | ||||||||
Defined benefit plan, net of income tax benefit/(expense) of $88, $(100), and $21 | (129 | ) | 168 | (52 | ) | |||||||
Other comprehensive (loss)/income | (189 | ) | 155 | (224 | ) | |||||||
Comprehensive (Loss)/Income | (57 | ) | (197 | ) | 91 | |||||||
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests | 8 | 34 | 20 | |||||||||
Comprehensive (Loss)/Income Attributable to NRG Energy, Inc. | (65 | ) | (231 | ) | 71 | |||||||
Dividends for preferred shares | 56 | 9 | 9 | |||||||||
Comprehensive (Loss)/Income Available for Common Stockholders | $ | (121 | ) | $ | (240 | ) | $ | 62 | ||||
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
(In millions) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 2,116 | $ | 2,254 | ||||
Funds deposited by counterparties | 72 | 63 | ||||||
Restricted cash | 457 | 268 | ||||||
Accounts receivable - trade, less allowance for doubtful accounts of $23 and $40 |
1,322 | 1,214 | ||||||
Inventory | 1,247 | 898 | ||||||
Derivative instruments | 2,425 | 1,328 | ||||||
Cash collateral paid in support of energy risk management activities | 187 | 276 | ||||||
Deferred income taxes | 174 | 258 | ||||||
Renewable energy grant receivable | 135 | 539 | ||||||
Current assets held-for-sale |
- |
19 | ||||||
Prepayments and other current assets | 447 | 479 | ||||||
Total current assets | 8,582 | 7,596 | ||||||
Property, Plant and Equipment | ||||||||
In service | 29,487 | 23,649 | ||||||
Under construction | 770 | 2,775 | ||||||
Total property, plant and equipment | 30,257 | 26,424 | ||||||
Less accumulated depreciation | (7,890 | ) | (6,573 | ) | ||||
Net property, plant and equipment | 22,367 | 19,851 | ||||||
Other Assets | ||||||||
Equity investments in affiliates | 771 | 453 | ||||||
Notes receivable, less current portion | 72 | 73 | ||||||
Goodwill | 2,574 | 1,985 | ||||||
Intangible assets, net of accumulated amortization of $1,402 and $1,977 | 2,567 | 1,140 | ||||||
Nuclear decommissioning trust fund | 585 | 551 | ||||||
Derivative instruments | 480 | 311 | ||||||
Deferred income taxes | 1,406 | 1,202 | ||||||
Non-current assets held-for-sale | 17 |
- |
||||||
Other non-current assets | 1,244 | 740 | ||||||
Total other assets | 9,716 | 6,455 | ||||||
Total Assets | $ | 40,665 | $ | 33,902 | ||||
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS (Continued) | ||||||||
As of December 31, | ||||||||
2014 | 2013 | |||||||
(In millions, except share data) | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Current portion of long-term debt and capital leases | $ | 474 | $ | 1,050 | ||||
Accounts payable | 1,060 | 1,038 | ||||||
Derivative instruments | 2,054 | 1,055 | ||||||
Cash collateral received in support of energy risk management activities | 72 | 63 | ||||||
Accrued interest expense | 252 | 185 | ||||||
Other accrued expenses | 553 | 480 | ||||||
Other current liabilities | 394 | 333 | ||||||
Total current liabilities | 4,859 | 4,204 | ||||||
Other Liabilities | ||||||||
Long-term debt and capital leases | 19,900 | 15,767 | ||||||
Nuclear decommissioning reserve | 310 | 294 | ||||||
Nuclear decommissioning trust liability | 333 | 324 | ||||||
Postretirement and other benefit obligations | 727 | 506 | ||||||
Deferred income taxes | 21 | 22 | ||||||
Derivative instruments | 438 | 195 | ||||||
Out-of-market contracts, net of accumulated amortization of $562 and $484 | 1,244 | 1,177 | ||||||
Other non-current liabilities | 847 | 695 | ||||||
Total non-current liabilities | 23,820 | 18,980 | ||||||
Total Liabilities | 28,679 | 23,184 | ||||||
2.822% and 3.625%, respectively, convertible perpetual preferred stock; $0.01 par value; 250,000 shares issued and outstanding | 291 | 249 | ||||||
Redeemable noncontrolling interest in subsidiaries | 19 | 2 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity | ||||||||
Common stock; $0.01 par value; 500,000,000 shares authorized; 415,506,176 and 401,126,780 shares issued and 336,662,624 and 323,779,252 shares outstanding at December 31, 2014 and 2013 | 4 | 4 | ||||||
Additional paid-in capital | 8,327 | 7,840 | ||||||
Retained earnings | 3,588 | 3,695 | ||||||
Less treasury stock, at cost; 78,843,552 and 77,347,528 shares at December 31, 2014 and 2013 | (1,983 | ) | (1,942 | ) | ||||
Accumulated other comprehensive (loss)/income | (174 | ) | 5 | |||||
Noncontrolling interest | 1,914 | 865 | ||||||
Total Stockholders' Equity | 11,676 | 10,467 | ||||||
Total Liabilities and Stockholders' Equity | $ | 40,665 | $ | 33,902 | ||||
NRG ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In millions) | ||||||||||||
Cash Flows from Operating Activities | ||||||||||||
Net income/(loss) | $ | 132 | $ | (352 | ) | $ | 315 | |||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||||||
Distributions and equity in earnings of unconsolidated affiliates | 49 | 84 | 2 | |||||||||
Bargain purchase gain related to GenOn acquisition |
- |
- |
(296 | ) | ||||||||
Depreciation and amortization | 1,523 | 1,256 | 950 | |||||||||
Provision for bad debts | 64 | 67 | 45 | |||||||||
Amortization of nuclear fuel | 46 | 36 | 39 | |||||||||
Amortization of financing costs and debt discount/premiums | (12 | ) | (33 | ) | 31 | |||||||
Adjustment to loss on debt extinguishment | 25 | (15 | ) | 9 | ||||||||
Amortization of intangibles and out-of-market contracts | 64 | 49 | 146 | |||||||||
Amortization of unearned equity compensation | 42 | 38 | 41 | |||||||||
(Gain)/loss on disposals and sales of assets, net | (4 | ) | (3 | ) | 11 | |||||||
Impairment losses | 97 | 558 |
- |
|||||||||
Changes in derivative instruments | (61 | ) | 164 | 124 | ||||||||
Changes in deferred income taxes and liability for uncertain tax benefits | (154 | ) | (67 | ) | (353 | ) | ||||||
Changes in nuclear decommissioning trust liability | 19 | 15 | 37 | |||||||||
Cash (used)/provided by changes in other working capital, net of acquisition and disposition effects: | ||||||||||||
Accounts receivable - trade | (2 | ) | (224 | ) | (131 | ) | ||||||
Inventory | (245 | ) | 11 | (172 | ) | |||||||
Prepayments and other current assets | 182 | (22 | ) | (26 | ) | |||||||
Accounts payable | (12 | ) | 275 | (132 | ) | |||||||
Accrued expenses and other current liabilities | (26 | ) | (114 | ) | 231 | |||||||
Other assets and liabilities | (217 | ) | (453 | ) | 278 | |||||||
Net Cash Provided by Operating Activities | 1,510 | 1,270 | 1,149 | |||||||||
Cash Flows from Investing Activities | ||||||||||||
Acquisition of businesses, net of cash acquired | (2,936 | ) | (494 | ) | (81 | ) | ||||||
Cash acquired in GenOn acquisition |
- |
- |
983 | |||||||||
Capital expenditures | (909 | ) | (1,987 | ) | (3,396 | ) | ||||||
Decrease/(increase) in restricted cash, net | 57 | (22 | ) | (66 | ) | |||||||
(Increase)/decrease in restricted cash to support equity requirements for U.S. DOE funded projects | (206 | ) | (26 | ) | 164 | |||||||
Decrease/(increase) in notes receivable | 25 | (11 | ) | (24 | ) | |||||||
Proceeds from renewable energy grants | 916 | 55 | 62 | |||||||||
Purchases of emission allowances, net of proceeds | (16 | ) | 5 | (1 | ) | |||||||
Investments in nuclear decommissioning trust fund securities | (619 | ) | (514 | ) | (436 | ) | ||||||
Proceeds from sales of nuclear decommissioning trust fund securities | 600 | 488 | 399 | |||||||||
Proceeds from sale of assets, net | 203 | 13 | 137 | |||||||||
Investments in unconsolidated affiliates | (103 | ) |
- |
(25 | ) | |||||||
Other | 85 | (35 | ) | 22 | ||||||||
Net Cash Used by Investing Activities | (2,903 | ) | (2,528 | ) | (2,262 | ) | ||||||
Cash Flows from Financing Activities | ||||||||||||
Payment of dividends to preferred and common stockholders | (196 | ) | (154 | ) | (50 | ) | ||||||
Net receipts/(payments for) from settlement of acquired derivatives that include financing elements | 9 | 267 | (68 | ) | ||||||||
Payment for treasury stock | (39 | ) | (25 | ) |
- |
|||||||
Sales proceeds and other contributions from noncontrolling interests in subsidiaries | 819 | 531 | 347 | |||||||||
Proceeds from issuance of common stock | 21 | 16 |
- |
|||||||||
Proceeds from issuance of long-term debt | 4,563 | 1,777 | 3,165 | |||||||||
Payment of debt issuance and hedging costs | (67 | ) | (50 | ) | (35 | ) | ||||||
Payments for short and long-term debt | (3,827 | ) | (935 | ) | (1,260 | ) | ||||||
Other | (18 | ) |
- |
- |
||||||||
Net Cash Provided by Financing Activities | 1,265 | 1,427 | 2,099 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (10 | ) | (2 | ) | (4 | ) | ||||||
Net (Decrease)/Increase in Cash and Cash Equivalents | (138 | ) | 167 | 982 | ||||||||
Cash and Cash Equivalents at Beginning of Period | 2,254 | 2,087 | 1,105 | |||||||||
Cash and Cash Equivalents at End of Period | $ | 2,116 | $ | 2,254 | $ | 2,087 | ||||||
Appendix Table A-1: Fourth Quarter 2014 Regional Adjusted EBITDA Reconciliation | |||||||||||||||
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
|||||||||||||||
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. | (99) | (18) | 575 | (64) | (10) | (265) | 119 | ||||||||
Plus: | |||||||||||||||
Net Income Attributable to Non-Controlling Interest |
- | (19) | (1) | (14) | - | 12 | (22) | ||||||||
Interest Expense, net | - | 1 | 18 | 42 | 69 | 176 | 306 | ||||||||
Income Tax | - | - | - | - | (11) | 82 | 71 | ||||||||
Depreciation, Amortization and ARO Expense |
12 | 2 | 297 | 76 | 42 | 6 | 435 | ||||||||
Amortization of Contracts | 1 | - | (19) | 4 | 10 | 1 | (3) | ||||||||
EBITDA | (86) | (34) | 870 | 44 | 100 | 12 | 906 | ||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates |
- | - | 6 | (1) | 12 | 3 | 20 | ||||||||
Integration and Transaction Costs
|
1 | - | - | - | 2 | 12 | 15 | ||||||||
Legal Settlements | 1 | - | - | - | - | - | 1 | ||||||||
Deactivation Costs | - | - | 27 | - | - | - | 27 | ||||||||
Sale of Businesses | - | - | (18) | - | - | - | (18) | ||||||||
Asset Write Offs and Impairments
|
- | - | 7 | 18 | - | (23) | 2 | ||||||||
Market to Market (MtM) Losses/(Gains) on economic hedges |
249 | - | (569) | (6) | - | - | (326) | ||||||||
Adjusted EBITDA | 165 | (34) | 323 | 55 | 114 | 4 | 627 | ||||||||
Appendix Table A-2: Fourth Quarter 2013 Regional Adjusted EBITDA Reconciliation | |||||||||||||||
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
|||||||||||||||
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. |
225 | (4) | (452) | (16) | 33 | (83) | (297) | ||||||||
Plus: | . | ||||||||||||||
Net Income Attributable to Non-Controlling Interest |
- | - | - | (5) | 4 | 8 | 7 | ||||||||
Interest Expense, net | 1 | 1 | 27 | 15 | 18 | 154 | 216 | ||||||||
Income Tax | - | - | - | - | 3 | (230) | (227) | ||||||||
Depreciation, Amortization and ARO Expense |
47 | 1 | 212 | 26 | 22 | 8 | 316 | ||||||||
Amortization of Contracts | 5 | - | (37) | - | 1 | - | (31) | ||||||||
EBITDA | 277 | (2) | (250) | 20 | 81 | (143) | (17) | ||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | 5 | (3) | 12 | 4 | 18 | ||||||||
Integration and Transaction
Costs |
1 | - | - | - | - | 33 | 34 | ||||||||
Legal Settlements | 3 | - | - | - | - | - | 3 | ||||||||
Deactivation Costs | - | - | 6 | - | - | - | 6 | ||||||||
Asset Write Offs and Impairments
|
- | - | 459 | - | - | 99 | 558 | ||||||||
Market to Market (MtM) Losses/(Gains) on economic hedges |
(101) | - | 166 | 1 | - | - | 66 | ||||||||
Adjusted EBITDA | 180 | (2) | 386 | 18 | 93 | (6) | 669 | ||||||||
Appendix Table A-3: Full Year 2014 Regional Adjusted EBITDA Reconciliation | |||||||||||||||
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
|||||||||||||||
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. | 138 | (53) | 1,094 | (163) | 65 | (947) | 134 | ||||||||
Plus: | |||||||||||||||
Net Income Attributable to Non-Controlling Interest |
- | (19) | (1) | 1 | 16 | 1 | (2) | ||||||||
Interest Expense, net | 1 | 1 | 75 | 133 | 165 | 823 | 1,198 | ||||||||
Income Tax | - | - | 1 | - | 4 | (2) | 3 | ||||||||
Depreciation, Amortization and ARO Expense |
123 | 6 | 1,002 | 247 | 136 | 32 | 1,546 | ||||||||
Amortization of Contracts | (2) | - | (29) | 8 | 18 | 1 | (4) | ||||||||
EBITDA | 260 | (65) | 2,142 | 226 | 404 | (92) | 2,874 | ||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates |
- | - | 11 | (12) | 47 | 27 | 73 | ||||||||
Integration and Transaction Costs |
3 | - | 1 | - | 4 | 76 | 84 | ||||||||
Legal Settlements | 5 | - | - | - | - | - | 5 | ||||||||
Deactivation Costs | - | - | 41 | - | - | 1 | 42 | ||||||||
Sale of Businesses | - | - | (35) | - | - | - | (35) | ||||||||
Asset Write Offs and Impairments |
- | - | 81 | 29 | - | (13) | 97 | ||||||||
Market to Market (MtM) Losses/(Gains) on economic hedges |
337 | - | (343) | (6) | - | (1) | (13) | ||||||||
Adjusted EBITDA | 604 | (65) | 1,898 | 237 | 455 | (1) | 3,128 | ||||||||
Appendix Table A-4: Full Year 2013 Regional Adjusted EBITDA Reconciliation | |||||||||||||||
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss) |
|||||||||||||||
Home | Home | ||||||||||||||
($ in millions) | Retail | Solar | Business | Renew | Yield | Corp | Total | ||||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. | 349 | (9) | (51) | (71) | 119 | (723) | (386) | ||||||||
Plus: | |||||||||||||||
Net Income Attributable to Non-Controlling Interest |
- | - | - | 22 | 13 | (1) | 34 | ||||||||
Interest Expense, net | 3 | - | 79 | 50 | 50 | 654 | 836 | ||||||||
Loss on Debt Extinguishment | - | - | - | - | - | 50 | 50 | ||||||||
Income Tax | - | - | - | - | 8 | (290) | (282) | ||||||||
Depreciation, Amortization and ARO Expense |
175 | 4 | 915 | 99 | 61 | 22 | 1,276 | ||||||||
Amortization of Contracts | 51 | - | (29) | - | 2 | - | 24 | ||||||||
EBITDA | 578 | (5) | 914 | 100 | 253 | (287) | 1,552 | ||||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates | - | - | 23 | (4) | 40 | 20 | 79 | ||||||||
Integration and Transaction Costs
|
- | - | - | - | - | 128 | 128 | ||||||||
Legal Settlements | 3 | - | - | - | - | - | 3 | ||||||||
Deactivation Costs | - | - | 23 | - | - | - | 23 | ||||||||
Asset Write Offs and Impairments
|
- | - | 462 | 4 | - | 100 | 566 | ||||||||
Market to Market (MtM) Losses/(Gains) on economic hedges
|
(53) | - | 334 | 1 | - | 2 | 285 | ||||||||
Adjusted EBITDA | 528 | (5) | 1,758 | 101 | 293 | (39) | 2,636 | ||||||||
Appendix Table A-5: 2014 and 2013 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, 2014 | December 31, 2013 ((1)) | |||
Net Cash Provided by Operating Activities | 396 | 447 | |||
Adjustment for change in collateral | (189) | (12) | |||
Reclassifying of net receipts (payments) for settlement of acquired derivatives that include financing elements | 73 | 90 | |||
Add: Merger and integration expenses | 19 | 25 | |||
Adjusted Cash Flow from Operating Activities | 299 | 550 | |||
Maintenance CapEx, net2 | (63) | (103) | |||
Environmental CapEx, net | (76) | (54) | |||
Preferred dividends | (2) | (2) | |||
Distributions to non-controlling interests | (19) | (5) | |||
Free cash flow – before Growth investments | 139 | 386 |
(1) Revised to reflect new Adjusted Cash Flow from Operating Activities methodology
(2) Excludes merger and integration
Appendix Table A-6: 2014 and 2013 Full Year 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 |
||||
($ in millions) |
12 months ended
December 31, 2014 |
12 months ended
December 31, 2013 (1) |
||
Net Cash Provided by Operating Activities | 1,510 | 1,270 | ||
Adjustment for change in collateral | (89) | 47 | ||
Reclassifying of net receipts (payments) for settlement of acquired derivatives that include financing elements | 9 | 267 | ||
Add: Merger and integration expenses | 95 | 141 | ||
Adjusted Cash Flow from Operating Activities | 1,525 | 1,725 | ||
Maintenance CapEx, net2 | (254) | (325) | ||
Environmental CapEx, net | (254) | (104) | ||
Preferred dividends | (9) | (9) | ||
Distributions to non-controlling interests | (57) | (5) | ||
Free cash flow – before Growth investments | 951 | 1,282 |
(1) Revised to reflect new Adjusted Cash Flow from Operating Activities methodology
(2) Excludes merger and integration
Appendix Table A-8: Adjusted NRG Yield Drop Down Assets Projected Reg
G.
The following table summarizes the calculation of Adjusted
EBITDA and CAFD and provides a reconciliation to income before taxes:
2014 Q4 Drop Downs | ||
(dollars in millions) | ||
Income Before Taxes | 3 | |
Adjustments to net income to arrive at Adjusted EBITDA: | ||
Depreciation and amortization | 81 | |
Interest expense, net | 36 | |
Adjusted EBITDA | 120 | |
Cash Interest Paid | (33) | |
Working Capital / Other | 1 | |
Maintenance capital expenditures | ‒ | |
Principal amortization of indebtedness | (53) | |
Cash Available for Distribution | 35 |
Table A-9: Adjusted EBITDA, Full Year 2014 NRG Business Segments
The
following table summarizes the calculation of Adjusted EBITDA and
provides a reconciliation to net income/ (loss)
Gulf | Carbon | ||||||||||||
($ in millions) | East | Coast | West | B2B | 360 | Total | |||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. | 948 | 221 | 90 | (155) | (10) | 1,094 | |||||||
Plus: | |||||||||||||
Net Income Attributable to Non-Controlling Interest |
(1) | - | - | - | - | (1) | |||||||
Interest Expense, net | 64 | (1) | 11 | 1 | - | 75 | |||||||
Income Tax | - | - | - | 1 | - | 1 | |||||||
Depreciation, Amortization and ARO Expense |
303 | 592 | 93 | 13 | 1 | 1,002 | |||||||
Amortization of Contracts | (53) | 22 | (4) | 6 | - | (29) | |||||||
EBITDA | 1,261 | 834 | 190 | (134) | (9) | 2,142 | |||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates |
- | 2 | 2 | - | 7 | 11 | |||||||
Integration and Transaction
Costs |
1 | - | - | - | - | 1 | |||||||
Deactivation Costs | 13 | - | 28 | - | - | 41 | |||||||
Sale of Businesses | 6 | (41) | - | - | - | (35) | |||||||
Asset Write Offs
and Impairments |
6 | 72 | 3 | - | - | 81 | |||||||
Market to Market (MtM) Losses/(Gains) on economic hedges |
(43) | (480) | 10 | 170 | - | (343) | |||||||
Adjusted EBITDA | 1,244 | 387 | 233 | 35 | (2) | 1,898 |
Table A-10: Adjusted EBITDA, Full Year 2013 NRG Business Segments Adjusted EBITDA Reconciliation The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss)
Gulf | Carbon | ||||||||||||
($ in millions) | East | Coast | West | B2B | 360 | Total | |||||||
Net Income/(Loss) Attributable to NRG Energy, Inc. | (147) | (129) | 56 | 172 | (3) | (51) | |||||||
Plus: | |||||||||||||
Interest Expense, net | 68 | 8 | 2 | 1 | - | 79 | |||||||
Depreciation, Amortization and ARO Expense |
305 | 551 | 53 | 5 | 1 | 915 | |||||||
Amortization of Contracts | (48) | 20 | (4) | 3 | - | (29) | |||||||
EBITDA | 178 | 450 | 107 | 181 | (2) | 914 | |||||||
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates |
- | 2 | 18 | - | 3 | 23 | |||||||
Deactivation Costs | 19 | - | 4 | - | - | 23 | |||||||
Asset Write Offs and Impairments
|
460 | 2 | - | - | - | 462 | |||||||
Market to Market (MtM) Losses/(Gains) on economic hedges |
325 | 109 | (2) | (98) | - | 335 | |||||||
Adjusted EBITDA | 983 | 563 | 127 | 84 | 1 | 1,758 |
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 as supplemental. 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.
Cash Available for Distribution (CAFD) is adjusted EBITDA plus cash dividends from unconsolidated affiliates, less maintenance capital expenditures, pro-rata adjusted EBITDA from unconsolidated affiliates, cash interest paid, income taxes paid, principal amortization of indebtedness and changes in others assets. Management believes cash available for distribution is a relevant supplemental measure of the Company’s ability to earn and distribute cash returns to investors.
Source:
NRG Energy, Inc.
Media:
Karen Cleeve,
609.524.4608
David Knox, 832.357.5730
or
Investors:
Chad
Plotkin, 609.524.4526
Lindsey Puchyr, 609.524.4527