Key Highlights
- Transformation Plan on track with
$92 million in cost savings realized through September 30,
2017
- Initiating 2018 Adjusted EBITDA and
FCFbG guidance
- Repurchased $604 million1
of corporate debt, delivering approximately $47 million of
annualized interest savings, completing 2017 capital allocation
plan
- Closed drop down of a 38 MW
portfolio of solar assets to NRG Yield and formed a new partnership
with NRG Yield focused primarily on community solar
projects
NRG Energy, Inc. (NYSE: NRG) today reported third quarter income
from continuing operations of $190 million. Income from continuing
operations for the first nine months of 2017 of $120 million, or
$0.58 per diluted common share, compares to a loss from continuing
operations of $92 million, or $0.10 per diluted common share for
the first nine months of 2016. Adjusted EBITDA for the three and
nine months ended September 30, 2017, was $806 million and $1,876
million, respectively. Year-to-date cash from continuing operations
totaled $844 million.
“I am pleased with the progress we have made on our
Transformation Plan,” said Mauricio Gutierrez, NRG President and
Chief Executive Officer. “While we executed well in the third
quarter, our results were impacted by mild temperatures and
Hurricane Harvey. I am encouraged by the market recovery in Texas
and the multiple regulatory initiatives that highlight the urgent
need for power market reform.”
Consolidated Financial Results
Three Months Ended Nine Months Ended ($ in millions)
9/30/17 9/30/16 9/30/17
9/30/16 Income/(Loss) from Continuing Operations $ 190 $ 128
$ 120 $ (92 ) Cash From Continuing Operations $ 732 $ 794 $ 844 $
1,674 Adjusted EBITDA $ 806 $ 895 $ 1,876 $ 2,234 Free Cash Flow
Before Growth Investments (FCFbG) $ 599 $ 726
$ 807 $ 985
1 Comprised of $398 million of 2018 Senior Notes and $206
million of 2021 Senior Notes. Transaction completed in October 2017
at total cost of $615 million.
Segment Results
Table 1: Income/(Loss) from Continuing
Operations
($ in millions)
Three Months Ended Nine Months Ended
Segment
9/30/17 9/30/16 9/30/17
9/30/16 Generation $ 258 $ 372 $ 200 $ (49 ) Retail 69 (78 )
380 734 Renewables 1 (4 ) 2 (84 ) (107 ) NRG Yield 1 41 50 85 116
Corporate (174 ) (218 ) (461 ) (786 ) Income/(Loss) from Continuing
Operations 2 $ 190 $ 128 $ 120 $ (92 )
1. In accordance with GAAP, 2016 results
have been restated to include full impact of the assets in the NRG
Yield Drop Down transactions which closed onSeptember 1, 2016,
March 27, 2017, and August 1, 2017.2. Includes mark-to-market gains
and losses of economic hedges.
Table 2: Adjusted EBITDA
($ in millions)
Three Months Ended Nine Months Ended
Segment
9/30/17 9/30/16 9/30/17
9/30/16 Generation 1 $ 226 $ 268 $ 431 $ 750 Retail 276 304
612 677 Renewables 2 66 77 148 143 NRG Yield 2 265 252 719 707
Corporate (27 ) (6 ) (34 ) (43 ) Adjusted EBITDA 3 $ 806 $
895 $ 1,876 $ 2,234
1. Generation regional Reg G
reconciliations are included in Appendices A-1 through A-4.2. In
accordance with GAAP, 2016 results have been restated to include
full impact of the assets in the NRG Yield Drop Down transactions,
which closed onSeptember 1, 2016, March 27, 2017, and August 1,
2017.3. See Appendices A-1 through A-4 for Operating Segment Reg G
reconciliations.
Generation: Third quarter Adjusted EBITDA was $226
million, $42 million lower than third quarter 2016 primarily driven
by:
- Gulf Coast: $46 million decrease due to
lower realized energy prices and lower generation, partially offset
by lower operating expenses, net of outages due to flooding in the
region.
- East/West1: $4 million increase from
higher capacity revenues, partially offset by lower energy margins
and unfavorable trading results in BETM.
Retail: Third quarter Adjusted EBITDA was $276 million,
$28 million lower than third quarter 2016 due to mild weather,
impacts from Hurricane Harvey, and higher supply costs, partially
offset by customer growth and reduced operating costs.
Renewables: Third quarter Adjusted EBITDA was $66
million, $11 million lower than third quarter 2016 due to lower
solar generation at Ivanpah and higher operating expenses.
NRG Yield: Third quarter Adjusted EBITDA was $265
million, $13 million higher than third quarter 2016 due to the
acquisition of the Utah utility-scale solar portfolio and higher
conventional availability, partially offset by lower renewable
resources in the current quarter.
Corporate: Third quarter Adjusted EBITDA was $(27)
million, $21 million lower than the third quarter 2016 due to a
reduction in shared service income, partially offset by lower
corporate marketing expenses and the elimination of operating
losses at residential solar following its full wind down of
operations.
1 Includes International, BETM and generation eliminations.
Liquidity and Capital Resources
Table 3: Corporate Liquidity
($ in millions)
9/30/17 12/31/16 Cash at NRG-Level 1
$ 383 $ 570 Revolver Availability 1,604 989
NRG-Level
Liquidity $ 1,987 $ 1,559
Restricted Cash 537 446 Cash at Non-Guarantor Subsidiaries
225 368
Total Liquidity $ 2,749
$ 2,373
1. Composed of cash of $998 million as of
9/30/2017, including unrestricted cash held at Midwest Generation
(a non-guarantor subsidiary), which can bedistributed to NRG
without limitation, pro-forma for $615 million of corporate debt
repurchases completed in October 2017.
NRG-Level cash as of September 30, 2017, pro-forma for the debt
repurchases completed in October 2017, was $383 million, a decrease
of $187 million from December 31, 2016. As of September 30, 2017,
total liquidity was $2.7 billion, including $1,604 million of the
Company’s credit facilities, as well as $537 million restricted
cash and $225 million cash at non-guarantor subsidiaries (primarily
NRG Yield).
NRG Strategic Developments
Transformation Plan
As of the end of the third quarter of 2017, NRG has realized $92
million, or 142%, of its 2017 cost savings target as part the
previously announced Transformation Plan. With respect to the
targeted asset sales under the Transformation Plan, NRG continues
to expect up to $4 billion of net cash proceeds, with transactions
leading to a majority of those proceeds announced by year end 2017,
and the balance in 2018. NRG anticipates these sales to include
100% of its interest in NRG Yield and its Renewables platform.
NRG Yield
Closed the November 2017 Drop Down Transaction
On November 1, 2017, NRG sold a 38 MW solar portfolio to NRG
Yield primarily comprised of assets from NRG's Solar Power Partners
(SPP) funds, in addition to other projects developed by NRG for
cash consideration of $71 million, excluding working capital
adjustments.
Investment Partnership with NRG Yield
Pursuant to the ROFO Agreement on September 26, 2017, NRG formed
a new investment partnership in which NRG Yield would invest up to
$50 million in a portfolio of distributed solar assets, primarily
comprised of community solar projects, developed by NRG.
Drop Down Offer to NRG Yield
Pursuant to the ROFO Agreement, NRG offered NRG Yield the
opportunity to acquire Buckthorn Solar, a 154 MW solar facility
located near Fort Stockton, Texas with a 25-year PPA with the City
of Georgetown.
Outlook for 2017 and Initiation of 2018 Guidance
NRG has decreased and narrowed the range of its Adjusted EBITDA
and FCF before growth investments guidance for 2017 and is
initiating guidance for fiscal year 2018. The 2018 guidance does
not include the impact from targeted asset sales announced on July
12, 2017, as part of the Transformation Plan.
Table 4: 2017 and 2018 Adjusted EBITDA
and FCF before Growth Investments Guidance
2017 2017 2018 ($
in millions)
Prior Guidance Revised
Guidance Guidance Adjusted EBITDA1 $2,565 -
$2,765 $2,400 - $2,500 $2,800 - $3,000 Cash From Operations $1,760
- $1,960 $1,600 - $1,700 $2,015 - $2,215 Free Cash Flow Before
Growth Investments (FCFbG) $1,290 - $1,490 $1,175 -
$1,275 $1,550 - $1,750
1. Non-GAAP financial measure; see
Appendix Tables A-1 through A-5 for GAAP Reconciliation to Net
Income that excludes fair value adjustments related toderivatives.
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 2017, the Company redeemed $398 million of its 7.625%
2018 Senior Notes through a tender offer at an early redemption
percentage of 101.42%, and $206 million of its 7.875% 2021 Senior
Notes through a tender offer at an average early redemption
percentage of 102.625%. This generated approximately $47 million of
annualized interest savings and extended the Company's nearest
corporate bond maturity to July 2022.
On October 18, 2017, NRG declared a quarterly dividend on the
company's common stock of $0.03 per share, payable November 15,
2017, to stockholders of record as of November 1, 2017. This
represents $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 2, 2017, 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 competitive power company in the
U.S., built on the strength of our diverse competitive electric
generation portfolio and leading retail electricity platform. A
Fortune 500 company, NRG creates value through best-in-class
operations, reliable and efficient electric generation, and a
retail platform serving residential and commercial businesses.
Working with electricity customers large and small, we implement
sustainable solutions for producing and managing energy, developing
smarter energy choices and delivering exceptional service as our
retail electricity providers serve almost three 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 press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act. These statements involve
estimates, expectations, projections, goals, assumptions, known and
unknown risks and uncertainties and can typically be identified by
terminology such as “may,” “should,” “could,” “objective,”
“projection,” “forecast,” “goal,” “guidance,” “outlook,” “expect,”
“intend,” “seek,” “plan,” “think,” “anticipate,” “estimate,”
“predict,” “target,” “potential” or “continue” or the negative of
these terms or other comparable terminology. Such forward-looking
statements include, but are not limited to, statements about the
Company’s future revenues, income, indebtedness, capital structure,
plans, expectations, objectives, projected financial performance
and/or business results and other future events, and views of
economic and market conditions.
Although NRG believes that its expectations are reasonable, it
can give no assurance that these expectations will prove to be
correct, and actual results may vary materially. Factors that could
cause actual results to differ materially from those contemplated
herein 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 regulations, 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, repowerings or asset sales, our ability to
implement value enhancing improvements to plant operations and
companywide processes, our ability to implement and execute on our
publicly announced transformation plan, including any cost savings,
margin enhancement, asset sale, and net debt targets, our ability
to proceed with projects under development or the inability to
complete the construction of such projects on schedule or within
budget, risks related to project siting, financing, construction,
permitting, government approvals and the negotiation of project
development agreements, our ability to progress development
pipeline projects, the timing or completion of the GenOn
restructuring, the inability to maintain or create successful
partnering relationships, our ability to operate our businesses
efficiently, 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
businesses of acquired companies, our ability to realize
anticipated benefits of transactions (including expected cost
savings and other synergies) or the risk that anticipated benefits
may take longer to realize than expected, our ability to close the
Drop Down transactions with NRG Yield, and our ability to execute
our Capital Allocation Plan. Debt and share repurchases 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 is 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 2,
2017. 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 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
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
Three months endedSeptember
30,
Nine months endedSeptember
30,
(In millions,
except for per share amounts)
2017 2016 2017 2016
Operating Revenues Total operating revenues $ 3,049 $
3,421 $ 8,132 $ 8,328
Operating Costs and
Expenses Cost of operations 2,156 2,440 5,852 5,711
Depreciation and amortization 272 298 789 826 Impairment losses 14
9 77 65 Selling, general and administrative 213 277 697 801
Reorganization 18 — 18 — Development activity expenses 14 21
49 65 Total operating costs and expenses 2,687
3,045 7,482 7,468 Other income - affiliate 14 48 104 144
Gain/(loss) on sale of assets — 4 4 (79 )
Operating Income 376 428 758 925
Other Income/(Expense) Equity in earnings of unconsolidated
affiliates 27 16 29 13 Impairment loss on investment — (8 ) — (147
) Other income, net 15 7 33 29 Loss on debt extinguishment, net (1
) (50 ) (3 ) (119 ) Interest expense (221 ) (237 ) (692 ) (718 )
Total other expense (180 ) (272 ) (633 ) (942 )
Income/(Loss)
from Continuing Operations Before Income Taxes 196 156 125 (17
) Income tax expense 6 28 5 75
Income/(Loss) from Continuing Operations 190 128 120 (92 )
(Loss)/Income from discontinued operations, net of income tax (27 )
265 (802 ) 256
Net Income/(Loss) 163
393 (682 ) 164
Less: Net loss attributable to
noncontrolling interest and redeemablenoncontrolling interests
(8 ) (9 ) (63 ) (49 )
Net Income/(Loss) Attributable to NRG
Energy, Inc. 171 402 (619 ) 213 Dividends for preferred shares
— — — 5 Gain on redemption of preferred shares — — —
(78 )
Net Income/(Loss) Available for Common
Stockholders $ 171 $ 402 $ (619 ) $ 286
Income/(Loss) per Share Attributable to
NRG Energy, Inc. CommonStockholders
Weighted average number of common shares outstanding — basic 317
316 317 315
Income from continuing operations per
weighted average common share— basic
$ 0.63 $ 0.43 $ 0.58 $ 0.10
(Loss)/Income from discontinued operations
per weighted average commonshare — basic
$ (0.09 ) $ 0.84 $ (2.53 ) $ 0.81
Income/(Loss)
per Weighted Average Common Share — Basic $ 0.54 $ 1.27
$ (1.95 ) $ 0.91 Weighted average number of common
shares outstanding — diluted 322 317 317 316
Income from continuing operations per
weighted average common share —diluted
$ 0.61 $ 0.43 $ 0.58 $ 0.10
(Loss)/Income from discontinued operations
per weighted average commonshare — diluted
$ (0.08 ) $ 0.84 $ (2.53 ) $ 0.81
Income/(Loss) per Weighted
Average Common Share — Diluted $ 0.53 $ 1.27 $
(1.95 ) $ 0.91
Dividends Per Common Share $ 0.03
$ 0.03 $ 0.09 $ 0.21
NRG ENERGY, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME/(LOSS)(Unaudited)
Three months endedSeptember
30,
Nine months endedSeptember
30,
2016 2015 2017 2016
(In millions) Net income/(loss) $ 163 $ 393 $ (682 )
$ 164
Other comprehensive income/(loss), net of tax
Unrealized gain/(loss) on derivatives, net
of income tax(benefit)/expense of $0, $(1), $1, and $1
7 27 6 (8 )
Foreign currency translation adjustments,
net of income taxexpense of $0, $0, $0, and $0
2 3 10 6
Available-for-sale securities, net of
income tax expense of$0, $0, $0, and $0
1 — 2 1
Defined benefit plans, net of income tax
expense of $0, $0,$0, and $0
(1 ) 31 26 32 Other comprehensive income 9
61 44 31
Comprehensive
income/(loss) 172 454 (638 ) 195
Less: Comprehensive loss attributable to
noncontrollinginterest and redeemable noncontrolling interests
(5 ) (2 ) (61 ) (70 )
Comprehensive income/(loss)
attributable to NRG Energy,Inc.
177 456 (577 ) 265 Dividends for preferred shares — — — 5 Gain on
redemption of preferred shares — — — (78 )
Comprehensive income/(loss) available
for commonstockholders
$ 177 $ 456 $ (577 ) $ 338
NRG ENERGY, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS
September 30,2017
December 31, 2016
(In millions,
except shares)
(unaudited) ASSETS Current Assets Cash
and cash equivalents $ 1,223 $ 938 Funds deposited by
counterparties 31 2 Restricted cash 537 446 Accounts receivable,
net 1,274 1,058 Inventory 630 721 Derivative instruments 475 1,067
Cash collateral posted in support of energy risk management
activities 203 150 Current assets - held for sale 33 9 Prepayments
and other current assets 354 404 Current assets - discontinued
operations — 1,919 Total current assets 4,760
6,714
Property, plant and equipment, net 15,332
15,369
Other Assets Equity investments in
affiliates 1,138 1,120 Notes receivable, less current portion 5 16
Goodwill 662 662 Intangible assets, net 1,838 1,973 Nuclear
decommissioning trust fund 670 610 Derivative instruments 206 181
Deferred income taxes 205 225 Non-current assets held-for-sale 10
10 Other non-current assets 644 841 Non-current assets -
discontinued operations — 2,961 Total other assets
5,378 8,599
Total Assets $ 25,470 $
30,682
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities Current portion of long-term debt and
capital leases $ 1,247 $ 516 Accounts payable 911 813 Derivative
instruments 522 1,092 Cash collateral received in support of energy
risk management activities 31 81 Accrued expenses and other current
liabilities 830 990 Accrued expenses and other current liabilities
- affiliate 164 — Current liabilities - discontinued operations —
1,210 Total current liabilities 3,705 4,702
Other Liabilities Long-term debt and capital leases
15,658 15,957 Nuclear decommissioning reserve 265 287 Nuclear
decommissioning trust liability 397 339 Deferred income taxes 21 20
Derivative instruments 307 284 Out-of-market contracts, net 213 230
Non-current liabilities held-for-sale 13 11 Other non-current
liabilities 1,116 1,176 Non-current liabilities - discontinued
operations — 3,184 Total non-current liabilities
17,990 21,488
Total Liabilities 21,695
26,190
Redeemable noncontrolling interest in
subsidiaries 85 46
Commitments and Contingencies
Stockholders’ Equity Common stock 4 4 Additional paid-in
capital 8,369 8,358 Retained deficit (4,713 ) (3,787 ) Less
treasury stock, at cost — 101,580,045 and 102,140,814 shares,
respectively (2,386 ) (2,399 ) Accumulated other comprehensive loss
(91 ) (135 ) Noncontrolling interest 2,507 2,405
Total Stockholders’ Equity 3,690 4,446
Total Liabilities and Stockholders’ Equity $ 25,470 $
30,682
NRG ENERGY, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
Nine months ended September 30, 2017
2016 (In millions) Cash Flows from Operating
Activities Net (loss)/income (682 ) 164 (Loss)/Income from
discontinued operations, net of income tax (802 ) 256
Income/(loss) from continuing operations $ 120 $ (92 ) Adjustments
to reconcile net (loss)/income to net cash provided by operating
activities: Distributions and equity in earnings of unconsolidated
affiliates 24 44 Depreciation and amortization 789 826 Provision
for bad debts 57 36 Amortization of nuclear fuel 37 39 Amortization
of financing costs and debt discount/premiums 44 42 Adjustment for
debt extinguishment 3 119 Amortization of intangibles and
out-of-market contracts 79 131 Amortization of unearned equity
compensation 27 23 Impairment losses 77 211 Changes in deferred
income taxes and liability for uncertain tax benefits 26 29 Changes
in nuclear decommissioning trust liability 20 24 Changes in
derivative instruments 25 30 Changes in collateral posted in
support of risk management activities (103 ) 261 Proceeds from sale
of emission allowances 21 11 (Gain)/loss on sale of assets (22 ) 70
Changes in other working capital (380 ) (130 )
Cash provided by
continuing operations 844 1,674
Cash (used)/provided by
discontinued operations (38 ) 67
Net Cash
Provided by Operating Activities 806 1,741
Cash Flows from Investing Activities Acquisitions of
businesses, net of cash acquired (36 ) (18 ) Capital expenditures
(760 ) (659 ) Decrease in notes receivable 11 2 Purchases of
emission allowances (47 ) (32 ) Proceeds from sale of emission
allowances 105 47 Investments in nuclear decommissioning trust fund
securities (402 ) (378 ) Proceeds from the sale of nuclear
decommissioning trust fund securities 382 354 Proceeds from
renewable energy grants and state rebates 8 11 Proceeds from sale
of assets, net of cash disposed of 36 84 Investments in
unconsolidated affiliates (31 ) (23 ) Other 22 31
Cash used by continuing operations (712 ) (581 )
Cash
(used)/provided by discontinued operations (53 ) 326
Net Cash Used by Investing Activities (765 ) (255 )
Cash
Flows from Financing Activities Payment of dividends to common
and preferred stockholders (28 ) (66 ) Payment for preferred shares
— (226 ) Net receipts from settlement of acquired derivatives that
include financing elements 2 6 Proceeds from issuance of long-term
debt 1,134 5,237 Payments for short and long-term debt (712 )
(5,353 ) Receivable from affiliate (125 ) — Payments for debt
extinguishment costs — (98 ) Contributions from, net of
distributions to, noncontrolling interest in subsidiaries 65 (127 )
Proceeds from issuance of stock — 1 Payment of debt issuance costs
(43 ) (70 ) Other - contingent consideration (10 ) (10 )
Cash
provided/(used) by continuing operations 283 (706 )
Cash
(used)/provided by discontinued operations (224 ) 119
Net Cash provided/(used) by Financing Activities 59
(587 ) Effect of exchange rate changes on cash and cash equivalents
(10 ) (6 )
Change in Cash from discontinued operations (315
) 512
Net Increase in Cash and Cash
Equivalents, Funds Deposited by Counterparties and
RestrictedCash
405 381
Cash and Cash Equivalents, Funds
Deposited by Counterparties and Restricted Cash at
Beginningof Period
1,386 1,322
Cash and Cash Equivalents, Funds
Deposited by Counterparties and Restricted Cash at End
ofPeriod
$ 1,791 $ 1,703
Appendix Table A-1: Third Quarter 2017
Adjusted EBITDA Reconciliation by Operating SegmentThe
following table summarizes the calculation of Adj. EBITDA and
provides a reconciliation to income/(loss) fromcontinuing
operations:
($ in millions)
GulfCoast
East/West(a)
Generation Retail Renewables
NRGYield
Corp/Elim
Total
Income/(Loss) fromContinuing
Operations
166
92 258
69 (4 ) 41
(174 ) 190 Plus: —
Interest expense, net 0 5 5 1 24 75 112 217 Income tax (2 ) 2 — —
(3 ) 8 1 6 Depreciation and amortization 69 27 96 29 51 88 8 272
ARO Expense 4 3 7 — 1 1 — 9 Contract amortization 2 1 3 (1 ) 1 18
(1 ) 20 Lease amortization 0 (2 )
(2 ) — — —
— (2 )
EBITDA 239 128 367
98 70 231 (54 ) 712
Adjustment to reflect NRGshare of adjusted
EBITDA inunconsolidated affiliates
(6 ) 7 1 (3 ) (12 ) 32 10 28
Acquisition-related transaction&
integration costs
— — — — — — 3 3 Reorganization costs 3 — 3 5 — — 10 18 Deactivation
costs — 2 2 — — — 5 7 Other non recurring charges 1 (4 ) (3 ) 2 2
(1 ) — Impairments — 1 1 — 13 — — 14
Mark to market (MtM)(gains)/losses on
economichedges
(135 ) (10 ) (145 ) 174
(5 ) — — 24
Adjusted EBITDA 102 124 226 276
66 265 (27 ) 806
(a) Includes International, BETM and
generation eliminations.
Third Quarter 2017 condensed financial
information by Operating Segment:
($ in millions)
GulfCoast
East/West(a)
Generation Retail Renewables NRG Yield
Corp/Elim
Total Operating revenues 655 431 1,086 1,936 140 282 (409 )
3,035 Cost of sales 394 202
596 1,458 4 15
(394 ) 1,679
Economic gross
margin 261 229 490 478 136
267 (15 ) 1,356
Operations &maintenance and othercost
of operations (b)
143 101 244 87 34 62 (15 ) 412
Selling, marketing,general
andadministrative(c)
26 13 39 107 14 4 31 195 Other expense/(income)(d)
(10 ) (9 ) (19 ) 8 22
(64 ) (4 ) (57 )
Adjusted EBITDA
102 124 226
276 66
265 (27 ) 806
(a) Includes International, BETM and
generation eliminations.(b) Excludes deactivation costs of $7
million.(c) Excludes reorganization costs of $18 million.(d)
Excludes impairments of $14 million, and acquisition and
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. Adjusted
EBITDA Operating revenues 3,049 12 (26 ) — — 3,035 Cost of
operations 1,737 (8 ) (50 )
— — 1,679
Gross
margin 1,312 20 24 — —
1,356
Operations & maintenanceand other cost
of operations
419 — (7 ) — 412
Selling, marketing, general&
administrative (a)
213 — — — (18 ) 195 Other expense/(income)(b) 490
(272 ) — — (275 )
(57 )
Income/(Loss) fromContinuing
Operations
190 292
24 7 293
806
(a) Other adj. includes reorganization
costs of $18 million.(b) Other adj, includes impairments of $14
million, and acquisition and integration costs of $3 million.
Appendix Table A-2: Third Quarter 2016
Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the
calculation of Adjusted EBITDA and provides a reconciliation to
income/(loss) fromcontinuing operations:
($ in millions)
GulfCoast
East/West(a)
Generation Retail Renewables
NRGYield
Corp/Elim
Total
Income/(Loss) fromContinuing
Operations
224 148
372 (78 ) 2
50
(218
)
128 Plus: Interest expense, net — 7 7 (1 ) 34
70 124 234 Income tax — (2 ) (2 ) — (3 ) 13 20 28
Loss on debtextinguishment
— — — — — — 50 50
Depreciation andamortization
108 26 134 26 48 75 15 298 ARO Expense 3 (6 ) (3 ) — — 1 — (2 )
Contract amortization 5 0 5 1 1 17 (1 ) 23 Lease amortization
— (2 ) (2 ) —
— — — (2 )
EBITDA 340 171 511 (52 )
82 226 (10 ) 757
Adjustment to reflect NRGshare of adjusted
EBITDAin unconsolidated affiliates
(1 ) 8 7 — (4 ) 26 (2 ) 27
Acquisition-relatedtransaction &
integrationcosts
— — — — — — 1 1 Reorganization costs — — — — — — 6 6 Deactivation
costs — 1 1 — — — 1 2 Gain on sale of assets — — — — — — (4 ) (4 )
Other non recurring charges 15 (5 ) 10 (2 ) — 2 10 Impairments — 9
9 — — — — 9
Mark to market (MtM)(gains)/losses on
economichedges
(206 ) (64 ) (270 ) 358
(1 ) — — 87
Adjusted EBITDA 148
120 268 304
77 252 (6
) 895
(a) Includes International, BETM and
generation eliminations.
Third Quarter 2016 condensed financial
information by Operating Segment:
($ in millions)
GulfCoast
East/West(a)
Generation Retail Renewables
NRGYield
Corp/Elim
Total Operating revenues 773 523 1,296 2,009 139 289 (362 )
3,371 Cost of sales 431 273
704 1,485 3 18
(363 ) 1,847
Economic gross
margin 342 250 592 524 136
271 1 1,524
Operations & maintenanceand other cost
ofoperations (b)
162 106 268 81 25 58 (1 ) 431
Selling, marketing, general&
administrative (c)
35 29 64 137 12 4 54 271 Other expense/(income) (d)
(3 ) (5 ) (8 ) 2 22
(43 ) (46 ) (73 )
Adjusted EBITDA
148 120
268 304 77
252 (6 )
895
(a) Includes International, BETM and
generation eliminations.(b) Excludes deactivation costs of $2
million.(c) Excludes reorganization costs of $6 million.(d)
Excludes loss on debt extinguishment of $50 million, impairments of
$9 million, gain on sale of assets of $4 million, and acquisition
and integrationcosts 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 3,421 12 (62 ) — — 3,371 Cost of operations
2,007 (11 ) (149 ) —
— 1,847
Gross margin
1,414 23 87 — — 1,524
Operations & maintenanceand other cost
of operations
433 — (2 ) — 431
Selling, marketing, general
&administrative (a)
277 — — — (6 ) 271 Other expense/(income) (b) 576
(587 ) — — (65 )
(73 )
Income/(Loss) fromContinuing
Operations
128 610
87 2 71
895
(a) Other adj. includes reorganization
costs of $6 million.(b) Other adj. includes loss on debt
extinguishment of $50 million, impairments of $9 million, gain on
sale of assets of $4 million, and acquisition andintegration costs
of $1 million.
Appendix Table A-3: YTD Third Quarter
2017 Adjusted EBITDA Reconciliation by Operating SegmentThe
following table summarizes the calculation of Adj. EBITDA and
provides a reconciliation to income/(loss) fromcontinuing
operations:
($ in millions)
GulfCoast
East/West(a)
Generation
Retail Renewables
NRGYield
Corp/Elim
Total
Income/(Loss) from
ContinuingOperations
59 141
200 380 (84
) 85 (461 )
120 Plus: Interest expense, net — 22 22 3 74 235 350
684 Income tax — 2 2 (9 ) (13 ) 15 10 5 Loss on debt extinguishment
— — — — 3 — — 3 Depreciation and amortization 207 80 287 87 150 241
24 789 ARO Expense 11 9 20 — 2 3 (1 ) 24 Contract Amortization 10 3
13 — 1 52 (1 ) 65 Lease amortization —
(6 ) (6 ) — — —
— (6 )
EBITDA 287 251
538 461 133 631 (79 )
1,684
Adjustment to reflect NRG share ofadjusted
EBITDA inunconsolidated affiliates
15 19 34 (10 ) (21 ) 79 11 93
Acquisition-related transaction
&integration costs
(10 ) — (10 ) — — 2 3 (5 ) Reorganization costs 3 — 3 5 — — 28 36
Deactivation costs — 3 3 — — — 9 12 Other non recurring charges (14
) (2 ) (16 ) 2 9 7 (6 ) (4 ) Impairments 42 — 42 — 35 — — 77
Mark to market (MtM)(gains)/losses on
economic hedges
(152 ) (11 ) (163 ) 154
(8 ) — — (17 )
Adjusted EBITDA 171
260 431 612
148 719 (34
) 1,876
(a) Includes International, BETM and
generation eliminations.
YTD Third Quarter 2017 condensed financial
information by Operating Segment:
($ in millions)
GulfCoast
East/West(a)
Generation Retail Renewables
NRGYield
Corp/Elim
Total Operating revenues 1,758 1,125 2,883 4,875 357 819
(946 ) 7,988 Cost of sales 1,049 496
1,545 3,669 11
45 (908 ) 4,362
Economic
gross margin 709 629 1,338 1,206
346 774 (38 ) 3,626
Operations & maintenance andother cost
of operations (b)
440 329 769 246 107 193 (29 ) 1,286
Selling, marketing, general
&administrative (c)
32 120 152 332 43 16 118 661 Other expense/(income) (d)
66 (80 ) (14 ) 16
48 (154 ) (93 ) (197 )
Adjusted
EBITDA 171 260
431 612 148
719 (34 )
1,876
(a) Includes International, BETM and
generation eliminations.(b) Excludes deactivation costs of $12
million.(c) Excludes reorganization costs of $36 million.(d)
Excludes impairments of $77 million, acquisition-related
transaction & integration costs of $5 million, and loss on debt
extinguishment 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 8,132 41 (185 ) — — 7,988 Cost of operations
4,554 (24 ) (168 ) —
— 4,362
Gross margin
3,578 65 (17 ) — —
3,626
Operations & maintenance andother cost
of operations
1,298 — (12 ) — 1,286
Selling, marketing, general
&administrative(a)
697 (36 ) 661 Other expense/(income) (b) 1,463
(1,561 ) — — (197 )
(197 )
Income/(Loss) from
ContinuingOperations
120 1,626
(17 ) 12 233
1,876
(a) Other adj. includes reorganization
costs of $36 million.(b) Other adj. includes impairments of $77
million, acquisition-related transaction & integration costs of
$5 million, and loss on debtextinguishment of $3 million.
Appendix Table A-4: YTD Third Quarter
2016 Adjusted EBITDA Reconciliation by Operating SegmentThe
following table summarizes the calculation of Adjusted EBITDA and
provides a reconciliation to income/(loss)from continuing
operations:
($ in millions)
GulfCoast
East/West(a)
Generation Retail Renewables
NRGYield
Corp/Elim
Total
(Loss)/Income from
ContinuingOperations
(247 ) 198
(49 ) 734 (107
) 116 (786 )
(92 ) Plus: Interest expense, net 1 23 24 (1 )
84 212 391 710 Income tax — (2 ) (2 ) 1 (14 ) 25 65 75 Loss on debt
extinguishment — — — — — — 119 119 Depreciation and amortization
251 80 331 83 143 224 45 826 ARO Expense 8 2 10 — 1 2 0 13 Contract
Amortization 11 4 15 5 1 57 (3 ) 75 Lease amortization
— (6 ) (6 ) — —
— — (6 )
EBITDA
24 299 323 822 108 636
(169 ) 1,720
Adjustment to reflect NRG shareof adjusted
EBITDA inunconsolidated affiliates
5 18 23 — (2 ) 68 3 92
Acquisition-related transaction
&integration costs
— 1 1 — — 6 7 Reorganization costs — — — 5 3 — 17 25 Deactivation
costs — 13 13 — — — 1 14 Loss on sale of assets — — — — — — 79 79
Other non recurring charges 19 (6 ) 13 — 8 3 2 26 Impairments — 26
26 — 27 — 12 65 Impairment loss on investment 137 5 142 — (1 ) — 6
147
MtM (gains)/losses on economichedges
208 1 209
(150 ) — — — 59
Adjusted EBITDA 393
357 750 677
143 707
(43 ) 2,234
(a) Includes International, BETM and
generation eliminations.
YTD Third Quarter 2016 condensed financial
information by Operating Segment:
($ in millions)
GulfCoast
East/West(a)
Generation Retail Renewables
NRGYield
Corp/Elim
Total Operating revenues 2,002 1,439 3,441 4,918 337 840
(807 ) 8,729 Cost of sales 1,027 616
1,643 3,633 12
48 (810 ) 4,526
Economic
gross margin 975 823 1,798 1,285
325 792 3 4,203
Operations & maintenanceand other cost
of operations (b)
467 434 901 249 107 184 (3 ) 1,438
Selling, marketing, general
&administrative (c)
32 163 195 357 40 10 174 776 Other expense/(income) (d)
83 (131 ) (48 ) 2
35 (109 ) (125 ) (245 )
Adjusted
EBITDA 393 357
750 677 143
707 (43 )
2,234
(a) Includes International, BETM and
generation eliminations.(b) Excludes deactivation costs of $14
million.(c) Excludes reorganization costs of $25 million.(d)
Excludes loss on sale of assets of $79 million, loss on debt
extinguishment of $119 million, impairments of $65 million, and
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 8,328 41 360 — — 8,729 Cost of operations
4,259 (34 ) 301 —
— 4,526
Gross margin
4,069 75 59 — —
4,203
Operations & maintenance andother cost
of operations
1,452 — — (14 ) — 1,438
Selling, marketing, general
&administrative (a)
801 (25 ) 776 Other expense/(income) (b) 1,908
(1,938 ) — — (215 )
(245 )
(Loss)/Income from Continuing Operations
(92 ) 2,013
59 14 240
2,234
(a) Other adj. includes reorganization
costs of $25 million.(b) Other adj. includes loss on debt
extinguishment of $119 million, loss on sale of assets of $79
million, impairments of $65 million, and acquisition-related
transaction & integration costs of $7 million.
Appendix Table A-5: 2017 and 2016 QTD
and YTD Third Quarter Adjusted Cash Flow from
OperationsReconciliationsThe following table summarizes
the calculation of adjusted cash flow operating activities
providing a reconciliationto net cash provided by operating
activities:
Three Months Ended ($ in millions)
September 30, 2017 September 30, 2016 Net
Cash Provided by Operating Activities 732
794
Reclassifying of net receipts for
settlement of acquired derivatives thatinclude financing
elements
— 2 Sale of Land — — Merger, integration, and cost-to-achieve
expenses (1) 14 22 Cash contribution to GenOn pension plan (2) 13 —
Return of capital from equity investments 4 (5 ) Adjustment for
change in collateral (3) (86 ) 62
Adjusted Cash Flow from Operating Activities
677 875 Maintenance CapEx, net
(4) (41 ) (79 ) Environmental CapEx, net — (36 ) Preferred
dividends — — Distributions to non-controlling interests
(37 ) (34 )
Free Cash Flow Before Growth
Investments (FCFbG) 599
726
(1) 2017 includes cost-to-achieve expenses
associated with the Transformation Plan announced on July 2017
call; 2016 includes cost-to-achieveexpenses associated with the
$150 million savings announced on September 2015 call.(2) Reflects
cash contribution related to Legacy GenOn pension liability
retained by NRG(3) Reflects change in NRG’s cash collateral balance
as of 3Q2017 including $79 million of collateral postings from our
deconsolidated affiliate(GenOn)(4) Includes insurance proceeds of
$4 million and $2 million in 2017 and 2016, respectively
Nine Months Ended ($ in millions)
September 30, 2017 September 30, 2016
Net Cash Provided by Operating Activities 844
1,674
Reclassifying of net receipts for
settlement of acquired derivatives thatinclude financing
elements
2 6 Sale of Land 8 — Merger, integration, and cost-to-achieve
expenses (1) 14 47 Cash contribution to GenOn pension plan (2) 13 —
Return of capital from equity investments 22 6 Adjustment for
change in collateral (3) 182 (261 )
Adjusted Cash Flow from Operating Activities
1,085 1,472 Maintenance CapEx,
net (4) (125 ) (171 ) Environmental CapEx, net (25 ) (198 )
Preferred dividends — (2 ) Distributions to non-controlling
interests (128 ) (116 )
Free Cash Flow
Before Growth Investments (FCFbG) 807
985
(1) 2017 includes cost-to-achieve expenses
associated with the Transformation Plan announced on July 2017
call; 2016 includes cost-to-achieveexpenses associated with the
$150 million savings announced on September 2015 call.(2) Reflects
cash contribution related to Legacy GenOn pension liability
retained by NRG(3) Reflects change in NRG’s cash collateral balance
as of 3Q2017 including $79 million of collateral postings from our
deconsolidated affiliate(GenOn)(4) Includes insurance proceeds of
$22 million and $33 million in 2017 and 2016, respectively
Appendix Table A-6: Third Quarter YTD
2017 Sources and Uses of LiquidityThe following table
summarizes the sources and uses of liquidity through third quarter
of 2017:
($ in millions)
Nine Months EndedSeptember 30,
2017
Sources: Adjusted cash flow from operations 1,085 Increase
in credit facility 615 Issuance of Agua Caliente HoldCo debt 130
Growth investments and acquisitions, net 132 Asset sales 28 NYLD
Equity Issuance 34
Uses: Debt Repayments, net
of proceeds (528) Collateral (1) (182) Maintenance and
environmental capex, net (2) (150) Distributions to non-controlling
interests (128) Common Stock Dividends (28) Other Investing and
Financing (17)
Change in Total Liquidity
991
(1) Reflects change in NRG’s cash
collateral balance as of 3Q2017 including $79MM of collateral
postings from our deconsolidated affiliate(GenOn)(2) Includes
insurance proceeds of $22 million.
Appendix Table A-7: 2017 and 2018
Adjusted EBITDA Guidance ReconciliationThe following table
summarizes the calculation of Adjusted EBITDA providing
reconciliation to net income:
2017 Adjusted EBITDA Prior Guidance ($ in millions)
Low High GAAP Net Income 1 360
560 Income Tax 80 80 Interest Expense 825 825 Depreciation,
Amortization, Contract Amortization and ARO Expense 1,150 1,150
Adjustment to reflect NRG share of adjusted EBITDA inunconsolidated
affiliates 110 110 Other Costs 2 40
40
Adjusted EBITDA 2,565
2,765 2017 Adjusted
EBITDA Revised Guidance ($ in millions)
Low High GAAP Net Income 1 55
155 Income Tax 10 10 Interest Expense 835 835 Depreciation,
Amortization, Contract Amortization and ARO Expense 1,170 1,170
Adjustment to reflect NRG share of adjusted EBITDA inunconsolidated
affiliates 130 130 Other Costs 2 200
200
Adjusted EBITDA 2,400
2,500 2018 Adjusted EBITDA
Guidance ($ in millions)
Low
High GAAP Net Income 1 410 610 Income Tax 20 20 Interest
Expense 785 785 Depreciation, Amortization, Contract Amortization
and ARO Expense 1,180 1,180 Adjustment to reflect NRG share of
adjusted EBITDA inunconsolidated affiliates 135 135 Other Costs 2
270 270
Adjusted EBITDA
2,800 3,000
(1) For purposes of guidance, discontinued
operations are excluded and fair value adjustments related to
derivatives are assumed to bezero.
(2) Includes deactivation costs, gain on
sale of businesses, asset write-offs, impairments and other
non-recurring charges.
Appendix Table A-8: 2017 and 2018 FCFbG
Guidance ReconciliationThe following table summarizes the
calculation of Free Cash Flow before Growth providing
reconciliation to Cashfrom Operations:
2017 2017 2018 ($
in millions)
PriorGuidance
RevisedGuidance
Guidance Adjusted EBITDA $2,565 - $2,765 $2,400 -
$2,500 $2,800 - $3,000 Cash Interest payments (825 ) (835 ) (785 )
Cash Income tax (40 ) (25 ) (40 ) Collateral / working capital /
other 60 60 40
Cash From Operations $1,760 - $1,960 $1,600 - $1,700 $2,015 -
$2,215
Adjustments: Acquired Derivatives,
Cost-to-Achieve, Return ofCapital Dividends, Collateral and
Other
—
—
—
Adjusted Cash flow from operations $1,760 - $1,960 $1,600 - $1,700
$2,015 - $2,215 Maintenance capital expenditures, net (210) - (240)
(200) - (220) (210) - (240) Environmental capital expenditures, net
(25) - (45) (25) - (35) (0) - (5) Distributions to non-controlling
interests (185) - (205) (180) - (190)
(220) - (250) Free Cash Flow - before Growth Investments
$1,290 - $1,490 $1,175 - $1,275 $1,550 -
$1,750
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 Investments 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/20171102005712/en/
NRG Energy, Inc.Media:Sheri Woodruff, 609-524-4608Marijke
Shugrue, 609-524-5262orInvestors:Kevin L. Cole, CFA,
609-524-4526Lindsey Puchyr, 609-524-4527
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