RRI Energy, Inc. (NYSE: RRI)
-- Merger with Mirant to create GenOn Energy will create significant
near-term value driven by $150 million annual cost savings
-- Received stockholder approval from both companies
-- Entered into revolving credit facility and agreements to borrow
$1.925 billion, which will satisfy the financing condition in the
merger agreement
-- Received FERC approval and NY Public Service Commission clearance
-- Expect to close by the end of the year
-- Third quarter financial results improved year-over-year and reflect
continued depressed commodity prices and weak economic conditions
-- Investments to improve equipment performance resulted in 3% reduction
in unplanned outage rate compared to Q1
-- New Castle and Titus power plant non-cash impairments totaling $113
million charged in third quarter
RRI Energy, Inc. today is reporting open EBITDA of $212 million
for the third quarter of 2010, compared to $133 million for the
third quarter of 2009. The improvement was primarily due to
improved energy margins driven by higher heat rates related to
warmer weather in July and early August and improved economic
conditions compared to the same period last year. The company
reported adjusted EBITDA of $212 million in the third quarter of
2010, compared to $100 million in the third quarter of 2009. The
improvement was primarily due to the items mentioned above and a
reduction in losses from coal hedges. Free cash flow provided by
continuing operations during the first nine months of 2010 was $84
million, compared to a use of cash of ($182) million for the first
nine months of 2009. The improvement was primarily a result of
improved earnings and lower environmental capital expenditures.
"We have made excellent progress toward completing the steps
necessary to finalize our proposed merger with Mirant and expect to
close the transaction by the end of the year after we receive
clearance from the Department of Justice," said Mark Jacobs,
president and chief executive officer of RRI Energy. "Third quarter
financial results and market conditions have improved relative to
last year, but still reflect continued depressed commodity prices
and weak economic conditions."
Open EBITDA was $241 million for the first nine months of 2010,
compared to $129 million for the same period of 2009. Adjusted
EBITDA was $244 million for the first nine months of 2010, compared
to $42 million for the same period of 2009. The improvements were
due to the same factors as described above, partially offset by
increased plant operation and maintenance expenses to improve
equipment performance.
Income from continuing operations before income taxes for the
third quarter of 2010 was $41 million, compared to a loss from
continuing operations of $9 million for the third quarter of 2009.
The 2010 reported results include net unrealized gains from energy
derivatives of $51 million, $5 million in merger-related costs and
a $113 million charge for long-lived assets impairments. The
reported numbers for 2009 include net unrealized gains from energy
derivatives of $7 million.
The loss from continuing operations before income taxes for the
first nine months of 2010 was $361 million, compared to $334
million for the first nine months of 2009. The 2010 reported
results include net unrealized gains from energy derivatives of
$112 million, a $17 million charge for western states litigation
and similar settlements, $19 million in merger-related costs and a
$361 million charge for long-lived assets impairments. The reported
numbers for 2009 include net unrealized losses from energy
derivatives of $30 million and $8 million in severance charges.
Operating cash flow from continuing operations was $252 million for
the first nine months of 2010, compared to a use of cash of ($275)
million for the same period of 2009.
Non-GAAP Financial Measures
This press release and the attached financial tables include the
following non-GAAP financial measures:
-- EBITDA
-- Adjusted EBITDA
-- Open EBITDA
-- Adjusted cash flow provided by/(used in) continuing operations
-- Free cash flow provided by/(used in) continuing operations
-- Open energy gross margin
-- Other margin
-- Open gross margin
-- Total controllable costs
-- Total controllable costs/MWh
-- Total controllable costs/MW capacity
-- Gross debt
-- Net debt
-- Operation and maintenance, excluding severance
-- General and administrative, excluding severance and merger-related
costs
A reconciliation of these financial measures and the most
directly comparable GAAP measures is included above or in the
attached financial tables. Additional information regarding these
measures, including a discussion of their usefulness and purpose,
is included in the Form 8-K furnished along with this press
release. Certain factors that could affect GAAP financial measures
are not accessible on a forward-looking basis, but could be
material to future reported earnings and cash flows.
Webcast Of Earnings Conference Call
RRI Energy will host its third quarter 2010 earnings conference
call beginning at 10:00 a.m. Eastern Time on Wednesday, November 3,
2010. The conference call will be webcast live with audio and
slides at www.rrienergy.com in the Investor Relations section. A
replay of the call can be accessed approximately two hours after
the call's completion.
About RRI Energy, Inc.
RRI Energy, Inc. (NYSE: RRI) based in Houston, provides
electricity to wholesale customers in the United States. The
company is one of the largest independent power producers in the
nation with more than 14,000 megawatts of power generation capacity
across the United States. These strategically located generating
assets use natural gas, fuel oil and coal. RRI routinely posts all
important information on its web site at www.rrienergy.com.
Forward-Looking Statements
This news release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are statements that contain
projections, estimates or assumptions about our revenues, income,
capital structure and other financial items, our plans and
objectives for future operations or about our future economic
performance, possible transactions, dispositions, financings or
offerings, and our view of economic and market conditions. In many
cases you can identify forward-looking statements by terminology
such as "anticipate," "estimate," "believe," "think", "continue,"
"could," "intend," "may," "plan," "potential," "predict," "should,"
"will," "expect," "objective," "projection," "forecast," "goal,"
"guidance," "outlook," "effort," "target" and other similar words.
However, the absence of these words does not mean that the
statements are not forward-looking.
Actual results may differ materially from those expressed or
implied by forward-looking statements as a result of many factors
or events, including, but not limited to, statements about the
benefits of the proposed merger involving us and Mirant
Corporation, including our future financial position and operating
results and the expected timing or ability to obtain necessary
approvals and satisfy conditions to complete the merger and the
related financings, legislative, regulatory and/or market
developments, the outcome of pending or threatened lawsuits,
regulatory or tax proceedings or investigations, the effects of
competition or regulatory intervention, financial and economic
market conditions, access to capital, the timing and extent of
changes in law and regulation (including environmental), commodity
prices, prevailing demand and market prices for electricity,
capacity, fuel and emission allowances, weather conditions,
operational constraints or outages, fuel supply or transmission
issues, hedging ineffectiveness and other factors we discuss or
refer to in the "Risk Factors" sections of our most recent Annual
Report on Form 10-K and Quarterly Report on Form 10-Q filed with
the Securities and Exchange Commission (SEC). Our filings and other
important information are also available on the Investor Relations
page of our website at www.rrienergy.com.
Each forward-looking statement speaks only as of the date of the
particular statement and we undertake no obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Additional Information and Where To Find It
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
In connection with the proposed merger between us and Mirant, we
filed with the SEC a registration statement on Form S-4 that
includes a joint proxy statement of us and Mirant and that also
constitutes a prospectus of us. The registration statement was
declared effective by the SEC on September 13, 2010. We and Mirant
urge investors and shareholders to read the registration statement,
and any other relevant documents filed with the SEC, including the
joint proxy statement/prospectus that is a part of the registration
statement, because they contain important information. You may
obtain copies of all documents filed with the SEC regarding this
transaction, free of charge, at the SEC's website (www.sec.gov).
You may also obtain these documents, free of charge, from our
website (www.rrienergy.com) under the tab "Investor Relations" and
then under the heading "Company Filings." You may also obtain these
documents, free of charge, from Mirant's website (www.mirant.com)
under the tab "Investor Relations" and then under the heading "SEC
Filings."
RRI Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(thousands of dollars, except per share amounts)
Revenues:
Revenues (including
$49,536, $(25,095),
$98,621 and $(51,225)
unrealized gains
(losses)) $ 697,556 $ 507,179 $1,702,464 $1,363,140
---------- ---------- ---------- ----------
Expenses:
Cost of sales (including
$856, $31,826, $13,278
and $20,857 unrealized
gains) 305,616 267,632 837,415 872,373
Operation and maintenance 116,196 114,457 459,815 428,567
General and administrative 20,215 23,686 76,403 80,345
Western states litigation
and similar settlements - - 17,000 -
Gains on sales of assets
and emission and exchange
allowances, net (664) (1,013) (1,700) (21,184)
Long-lived assets
impairments 112,856 - 360,571 -
Depreciation and
amortization 64,968 67,724 196,436 203,228
---------- ---------- ---------- ----------
Total operating expense 619,187 472,486 1,945,940 1,563,329
---------- ---------- ---------- ----------
Operating Income (Loss) 78,369 34,693 (243,476) (200,189)
---------- ---------- ---------- ----------
Other Income (Expense):
Debt extinguishments gains
(losses) - (103) - 741
Interest expense (39,568) (44,614) (122,197) (136,600)
Interest income 126 407 492 1,376
Other, net 2,040 880 4,663 942
---------- ---------- ---------- ----------
Total other expense (37,402) (43,430) (117,042) (133,541)
---------- ---------- ---------- ----------
Income (Loss) from
Continuing Operations
Before Income Taxes 40,967 (8,737) (360,518) (333,730)
Income tax expense
(benefit) 18,805 9,532 69,657 (105,988)
---------- ---------- ---------- ----------
Income (Loss) from
Continuing Operations 22,162 (18,269) (430,175) (227,742)
Income from discontinued
operations 664 2,841 4,178 864,467
---------- ---------- ---------- ----------
Net Income (Loss) $ 22,826 $ (15,428) $ (425,997) $ 636,725
========== ========== ========== ==========
Basic and Diluted Earnings
(Loss) Per Share:
Income (loss) from
continuing operations $ 0.06 $ (0.05) $ (1.22) $ (0.65)
Income from discontinued
operations - 0.01 0.01 2.46
---------- ---------- ---------- ----------
Net income (loss) $ 0.06 $ (0.04) $ (1.21) $ 1.81
========== ========== ========== ==========
Weighted Average Common
Shares Outstanding
(in thousands):
- Basic 353,520 351,561 353,434 350,908
- Diluted 353,705 351,561 353,434 350,908
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
Results of Operations by Segment
and Adjusted and Open Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2010 2009 Change 2010 2009 Change
------ ------ ------ ------ ------ ------
(millions of dollars)
East coal open gross margin
(1) $ 172 $ 100 $ 72 $ 427 $ 310 $ 117
East gas open gross margin
(1) 85 67 18 196 155 41
West open gross margin (1) 71 81 (10) 101 118 (17)
Other open gross margin (1) 14 19 (5) 28 46 (18)
------ ------ ------ ------ ------ ------
Total 342 267 75 752 629 123
Operation and maintenance,
excluding severance (116) (114) (2) (458) (424) (34)
General and administrative,
excluding severance and
merger-related costs (16) (21) 5 (58) (77) 19
Other income (loss), net 2 1 1 5 1 4
------ ------ ------ ------ ------ ------
Open EBITDA 212 133 79 241 129 112
------ ------ ------ ------ ------ ------
Hedges and other items (1) (34) 33 1 (108) 109
Gains on sales of assets
and emission and exchange
allowances, net 1 1 - 2 21 (19)
------ ------ ------ ------ ------ ------
Adjusted EBITDA 212 100 112 244 42 202
------ ------ ------ ------ ------ ------
Unrealized gains (losses)
on energy derivatives 51 7 44 112 (30) 142
Western states litigation
and similar settlements - - - (17) - (17)
Severance (2) - (3) 3 (2) (8) 6
Merger-related costs (3) (5) - (5) (19) - (19)
Long-lived assets
impairments (113) - (113) (361) - (361)
Debt extinguishments gains - - - - 1 (1)
------ ------ ------ ------ ------ ------
EBITDA 145 104 41 (43) 5 (48)
------ ------ ------ ------ ------ ------
Depreciation and
amortization (65) (68) 3 (196) (203) 7
Interest expense, net (39) (45) 6 (122) (136) 14
------ ------ ------ ------ ------ ------
Income (loss) from
continuing operations
before income taxes $ 41 $ (9) $ 50 $ (361) $ (334) $ (27)
====== ====== ====== ====== ====== ======
(1) Segment profitability measure consists of open energy gross margin and
other margin.
(2) Includes severance classified in operation and maintenance and general
and administrative expenses.
(3) Includes merger-related costs classified in general and administrative.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
Consolidated Balance Sheets
September 30, December 31,
2010 2009
------------ ------------
(thousands of dollars,
except per share amounts)
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ 781,097 $ 943,440
Restricted cash 6,930 24,093
Accounts and notes receivable, principally
customer, net 124,054 152,569
Inventory 280,612 331,584
Derivative assets 175,146 132,062
Margin deposits 124,953 198,582
Prepayments and other current assets 86,404 86,844
Current assets of discontinued operations
($14,823 and $55,855 of margin deposits) 40,641 108,476
------------ ------------
Total current assets 1,619,837 1,977,650
------------ ------------
Property, plant and equipment, gross 5,766,852 6,330,879
Accumulated depreciation (1,644,285) (1,728,566)
------------ ------------
Property, Plant and Equipment, net 4,122,567 4,602,313
------------ ------------
Other Assets:
Other intangibles, net 290,977 305,913
Derivative assets 51,488 53,138
Prepaid lease 285,772 277,370
Other ($27,655 and $33,793 accounted for at
fair value) 198,165 239,078
Long-term assets of discontinued operations 3,230 5,232
------------ ------------
Total other assets 829,632 880,731
------------ ------------
Total Assets $ 6,572,036 $ 7,460,694
============ ============
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt $ 108 $ 404,505
Accounts payable, principally trade 99,346 142,787
Derivative liabilities 88,714 151,461
Margin deposits 33,479 2,860
Other 233,318 169,898
Current liabilities of discontinued
operations ($0 and $11,000 of margin
deposits) 14,891 58,452
------------ ------------
Total current liabilities 469,856 929,963
------------ ------------
Other Liabilities:
Derivative liabilities 35,964 61,436
Other 265,069 260,547
Long-term liabilities of discontinued
operations 13,315 13,700
------------ ------------
Total other liabilities 314,348 335,683
------------ ------------
Long-term Debt 1,949,689 1,949,771
------------ ------------
Commitments and Contingencies
Temporary Equity Stock-based Compensation 7,303 6,890
------------ ------------
Stockholders' Equity:
Preferred stock; par value $0.001 per share
(125,000,000 shares authorized; none
outstanding) - -
Common stock; par value $0.001 per share
(2,000,000,000 shares authorized;
353,432,149 and 352,785,985 issued) 114 114
Additional paid-in capital 6,268,528 6,259,248
Accumulated deficit (2,398,386) (1,972,389)
Accumulated other comprehensive loss (39,416) (48,586)
------------ ------------
Total stockholders' equity 3,830,840 4,238,387
------------ ------------
Total Liabilities and Equity $ 6,572,036 $ 7,460,694
============ ============
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
--------------------------
2010 2009
------------ ------------
(thousands of dollars)
Cash Flows from Operating Activities:
Net income (loss) $ (425,997) $ 636,725
Income from discontinued operations (4,178) (864,467)
------------ ------------
Loss from continuing operations (430,175) (227,742)
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities:
Depreciation and amortization 196,436 203,228
Deferred income taxes 67,566 (106,923)
Net changes in energy derivatives (107,469) 30,748
Gains on sales of assets and emission and
exchange allowances, net (1,700) (21,184)
Western states litigation and similar
settlements 17,000 -
Long-lived assets impairments 360,571 -
Amortization of deferred financing costs 5,220 5,405
Other, net (7,426) (1,392)
Changes in other assets and liabilities:
Accounts and notes receivable, net 29,411 117,255
Inventory 48,189 (1,399)
Margin deposits, net 104,248 (239,903)
Net derivative assets and liabilities (2,358) (26,816)
Western states litigation and similar
settlement payments - (3,449)
Accounts payable (23,814) (9,111)
Other current assets 361 7,817
Other assets (17,165) (19,858)
Taxes payable/receivable 773 (3,479)
Other current liabilities 23,726 36,779
Other liabilities (10,911) (15,719)
------------ ------------
Net cash provided by (used in) continuing
operations from operating activities 252,483 (275,743)
Net cash provided by discontinued
operations from operating activities 34,586 534,275
------------ ------------
Net cash provided by operating activities 287,069 258,532
------------ ------------
Cash Flows from Investing Activities:
Capital expenditures (64,041) (157,750)
Proceeds from sales of assets, net 8,385 35,931
Proceeds from sales of emission and exchange
allowances 139 19,180
Purchases of emission allowances (270) (7,624)
Other, net 4,863 2,998
------------ ------------
Net cash used in continuing operations
from investing activities (50,924) (107,265)
Net cash provided by (used in) discontinued
operations from investing activities (4,402) 313,775
------------ ------------
Net cash provided by (used in) investing
activities (55,326) 206,510
------------ ------------
Cash Flows from Financing Activities:
Payments of long-term debt (399,809) (59,413)
Proceeds from issuances of stock 1,899 4,584
------------ ------------
Net cash used in continuing operations
from financing activities (397,910) (54,829)
Net cash used in discontinued operations
from financing activities - (260,707)
------------ ------------
Net cash used in financing activities (397,910) (315,536)
------------ ------------
Net Change in Cash and Cash Equivalents, Total
Operations (166,167) 149,506
Less: Net Change in Cash and Cash Equivalents,
Discontinued Operations (3,824) (100,197)
Cash and Cash Equivalents at Beginning of
Period, Continuing Operations 943,440 1,004,367
------------ ------------
Cash and Cash Equivalents at End of Period,
Continuing Operations $ 781,097 $ 1,254,070
============ ============
Free Cash Flow Reconciliation
(Unaudited)
Nine Months Ended
September 30,
--------------------------
2010 2009
------------ ------------
(millions of dollars)
Operating cash flow from continuing operations $ 252 $ (275)
Change in margin deposits, net (104) 240
------------ ------------
Adjusted cash flow provided by (used in)
continuing operations 148 (35)
------------ ------------
Capital expenditures (64) (158)
Proceeds from sales of emission and exchange
allowances - 19
Purchases of emission allowances - (8)
------------ ------------
Free cash flow provided by (used in)
continuing operations $ 84 $ (182)
============ ============
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
Power Generation Operational and Financial Data
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2010 2009 Change 2010 2009 Change
-------- -------- -------- -------- -------- --------
(in millions) (in millions)
East Coal
Open energy
gross
margin (1) $ 113 $ 43 $ 70 $ 269 $ 178 $ 91
Other margin (2) 59 57 2 158 132 26
-------- -------- -------- -------- -------- --------
Open gross
margin (3)(4) $ 172 $ 100 $ 72 $ 427 $ 310 $ 117
======== ======== ======== ======== ======== ========
East Gas
Open energy
gross
margin (1) $ 27 $ 12 $ 15 $ 37 $ 18 $ 19
Other margin (2) 58 55 3 159 137 22
-------- -------- -------- -------- -------- --------
Open gross
margin
(3)(4) $ 85 $ 67 $ 18 $ 196 $ 155 $ 41
======== ======== ======== ======== ======== ========
West
Open energy
gross
margin (1) $ 7 $ 3 $ 4 $ 7 $ 12 $ (5)
Other margin (2) 64 78 (14) 94 106 (12)
-------- -------- -------- -------- -------- --------
Open gross
margin
(3)(4) $ 71 $ 81 $ (10) $ 101 $ 118 $ (17)
======== ======== ======== ======== ======== ========
Other
Open energy
gross
margin (1) $ 3 $ - $ 3 $ 3 $ - $ 3
Other margin (2) 11 19 (8) 25 46 (21)
-------- -------- -------- -------- -------- --------
Open gross
margin
(3)(4) $ 14 $ 19 $ (5) $ 28 $ 46 $ (18)
======== ======== ======== ======== ======== ========
Total
Open energy
gross
margin (1) $ 150 $ 58 $ 92 $ 316 $ 208 $ 108
Other margin (2) 192 209 (17) 436 421 15
-------- -------- -------- -------- -------- --------
Open gross
margin (4) $ 342 $ 267 $ 75 $ 752 $ 629 $ 123
======== ======== ======== ======== ======== ========
Total margin
capture
factor (5) 92.1% 94.8% -2.7% 87.0% 89.5% -2.5%
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2010 2009 Change 2010 2009 Change
-------- -------- -------- -------- -------- --------
Generation
(GWh) (6):
East Coal 5,513.9 4,943.5 570.4 15,592.3 14,711.6 880.7
East Gas 904.3 1,004.1 (99.8) 1,691.7 1,638.4 53.3
West 168.3 272.7 (104.4) 194.8 497.7 (302.9)
Other 356.6 11.6 345.0 394.0 73.9 320.1
-------- -------- -------- -------- -------- --------
Total 6,943.1 6,231.9 711.2 17,872.8 16,921.6 951.2
======== ======== ======== ======== ======== ========
Open Energy
Unit Margin
($/MWh) (7):
East Coal $ 20.49 $ 8.70 $ 11.79 $ 17.25 $ 12.10 $ 5.15
East Gas 29.86 11.95 17.91 21.87 10.99 10.88
West 41.59 11.00 30.59 35.93 24.11 11.82
Other 8.41 - 8.41 7.61 - 7.61
-------- -------- -------- -------- -------- --------
Weighted
average
total $ 21.60 $ 9.31 $ 12.29 $ 17.68 $ 12.29 $ 5.39
======== ======== ======== ======== ======== ========
(1) Open energy gross margin is calculated using the day-ahead and
real-time market power sales prices received by the plants less
market-based delivered fuel costs.
(2) Other margin represents power purchase agreements, capacity payments,
ancillary services revenues and selective commercial strategies
relating to optimizing our assets.
(3) Segment profitability measure.
(4) This figure excludes the effects of hedges and other items and
unrealized gains/losses on energy derivatives.
(5) Total margin capture factor is calculated by dividing open gross
margin generated by the plants by the total available open gross
margin, assuming 100% availability.
(6) Excludes generation related to power purchase agreements.
(7) Represents open energy gross margin divided by generation.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
Total Controllable Costs Metrics
(Unaudited)
Efficiency Measures - Total Controllable Costs
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(in millions, except per MWh and per MW data)
Operation and maintenance,
excluding severance (1) $ 116 $ 114 $ 458 $ 424
REMA lease expense (15) (15) (45) (45)
General and administrative,
excluding severance and
merger-related costs (1) 16 21 58 77
Maintenance capital
expenditures 4 10 24 45
---------- ---------- ---------- ----------
Total Controllable Costs $ 121 $ 130 $ 495 $ 501
========== ========== ========== ==========
TWh generation 6.9 6.2 17.9 16.9
Total Controllable
Costs/MWh $ 18 $ 21 $ 28 $ 30
MW capacity (2) 14,586 14,563 14,586 14,563
Total Controllable Costs
($ thousands)/
MW capacity $ 8.3 $ 8.9 $ 33.9 $ 34.4
Reconciliation
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2010 2009 2010 2009
---------- ---------- ---------- ----------
(in millions, except per MWh and per MW data)
Operation and maintenance
(O&M) $ 116 $ 115 $ 460 $ 429
General and administrative
(G&A) 21 23 77 80
Capital expenditures 14 43 64 158
---------- ---------- ---------- ----------
Total operation and
maintenance, general and
administrative and
capital expenditures $ 151 $ 181 $ 601 $ 667
========== ========== ========== ==========
Total Controllable Costs $ 121 $ 130 $ 495 $ 501
REMA lease expense in
operation and maintenance 15 15 45 45
Severance included in
operation and maintenance - 1 2 5
Severance included in
general and administrative - 2 - 3
Merger-related costs
included in general and
administrative 5 - 19 -
Environmental capital
expenditures 10 25 32 91
Capitalized interest - 8 8 22
---------- ---------- ---------- ----------
Total operation and
maintenance, general and
administrative and
capital expenditures $ 151 $ 181 $ 601 $ 667
========== ========== ========== ==========
TWh generation 6.9 6.2 17.9 16.9
Total O&M, G&A and capital
expenditures/MWh $ 22 $ 29 $ 34 $ 39
MW capacity (2) 14,586 14,563 14,586 14,563
Total O&M, G&A and capital
expenditures
($ thousands)/MW capacity $ 10.4 $ 12.4 $ 41.2 $ 45.8
(1) Excludes (a) severance charges incurred in connection with (i)
repositioning the company in connection with the sale of our retail
business and (ii) implementing our plant-specific operating model,
classified in operation and maintenance and general and administrative
and (b) merger-related costs classified in general and administrative.
Merger-related costs include financial advisory fees, legal costs,
stock-based compensation expense related to the modification of our
stock options and other merger-related expenses.
(2) MW capacity changed from September 30, 2009 to September 30, 2010 as a
result of MW re-ratings that occurred during the fourth quarter of 2009
and third quarter of 2010.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
East Coal
(Unaudited)
Net Heat Q3 Total Margin Q3 Generation
Generating Rate Capture Factor (GWh)
Capacity (MMBtu/ ---------------- -----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
-------- -------- ------- ------- -------- --------
Cheswick 565 10.0 83.8% 90.8% 674.1 810.5
Conemaugh (1) 281 9.4 95.8% 95.2% 543.9 471.3
Elrama 460 11.3 82.9% 89.3% 181.1 32.5
Keystone (1) 284 9.5 94.4% 92.9% 587.0 508.5
Portland 401 9.8 88.8% 85.7% 599.5 501.1
Seward 525 9.6 94.4% 87.8% 1,050.1 1,010.3
Shawville (1) 597 10.3 85.9% 93.8% 571.3 503.3
Titus 243 10.8 94.7% 93.5% 236.4 191.9
Avon Lake 763 9.3 87.8% 89.3% 704.8 690.1
New Castle 333 10.6 92.6% 96.1% 246.5 146.5
Niles 244 10.5 77.5% 89.5% 119.2 77.5
-------- ------- ------- -------- --------
East Coal Total 4,696 89.4% 90.5% 5,513.9 4,943.5
======== ======= ======= ======== ========
Net Heat Q3 YTD Total Margin Q3 YTD
Generating Rate Capture Factor Generation (GWh)
Capacity (MMBtu/ ---------------- -----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
-------- -------- ------- ------- -------- --------
Cheswick 565 10.0 70.0% 81.8% 1,735.1 2,050.6
Conemaugh (1) 281 9.4 92.8% 96.2% 1,453.5 1,496.9
Elrama 460 11.3 80.7% 82.8% 464.8 278.9
Keystone (1) 284 9.5 95.3% 88.6% 1,698.8 1,432.0
Portland 401 9.8 76.8% 84.8% 1,306.4 1,693.7
Seward 525 9.6 81.6% 71.0% 2,732.7 2,377.0
Shawville (1) 597 10.3 84.2% 90.1% 2,154.2 1,654.7
Titus 243 10.8 90.0% 93.6% 636.5 765.1
Avon Lake 763 9.3 83.4% 88.9% 2,351.4 2,313.2
New Castle 333 10.6 93.3% 88.6% 656.2 449.8
Niles 244 10.5 74.5% 70.8% 402.7 199.7
-------- ------- ------- -------- --------
East Coal Total 4,696 82.8% 84.5% 15,592.3 14,711.6
======== ======= ======= ======== ========
(1) The Company leases a 100% interest in the Shawville plant, a 16.67%
interest in the Keystone plant and a 16.45% interest in the Conemaugh
plant under facility lease agreements, which expire in 2026, 2034 and
2034, respectively. The table includes our net share of capacity for
the coal units of these plants.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
East Gas
(Unaudited)
Net
Genera- Heat Q3 Total Margin Q3 Generation
ting Rate Capture Factor (GWh)
Capacity (MMBtu/ ----------------- ----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
------- ------- ------ ------ ------- -------
Aurora 878 10.5 NM (1) NM (1) 16.5 2.8
Blossburg 19 14.6 NM (1) NM (1) 0.8 2.5
Brunot Island 289 10.4 NM (1) NM (1) 3.9 0.2
Gilbert 536 11.0 NM (1) NM (1) 16.5 4.0
Glen Gardner 160 14.6 NM (1) NM (1) 4.8 0.3
Hamilton 20 14.8 NM (1) NM (1) 0.6 0.1
Hunterstown 60 14.8 NM (1) NM (1) 7.6 0.2
Hunterstown CCGT 810 7.0 88.2% 99.1% 829.8 990.6
Mountain 40 14.3 NM (1) NM (1) 3.6 0.3
Orrtanna 20 14.4 NM (1) NM (1) 1.1 0.1
Portland 169 11.2 NM (1) NM (1) 3.7 0.7
Sayreville 224 13.8 NM (1) NM (1) 3.2 0.3
Shawnee 20 14.0 NM (1) NM (1) 0.2 0.2
Shawville (2) 6 10.2 NM (1) NM (1) - -
Titus 31 17.4 NM (1) NM (1) - -
Tolna 39 14.2 NM (1) NM (1) 2.6 0.2
Warren 68 12.8 NM (1) NM (1) - -
Werner 212 13.8 NM (1) NM (1) 4.0 0.6
Shelby 356 9.8 NM (1) NM (1) 5.4 1.0
------- ------ ------ ------- -------
East Gas Total 3,957 92.2% 95.1% 904.3 1,004.1
======= ====== ====== ======= =======
Net
Genera- Heat Q3 YTD Total Margin Q3 YTD
ting Rate Capture Factor Generation (GWh)
Capacity (MMBtu/ ----------------- ----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
------- ------- ------ ------ ------- -------
Aurora 878 10.5 NM (1) NM (1) 27.9 13.9
Blossburg 19 14.6 NM (1) NM (1) 1.2 2.6
Brunot Island 289 10.4 NM (1) NM (1) 8.9 3.6
Gilbert 536 11.0 NM (1) NM (1) 18.9 12.3
Glen Gardner 160 14.6 NM (1) NM (1) 4.9 0.3
Hamilton 20 14.8 NM (1) NM (1) 0.6 0.6
Hunterstown 60 14.8 NM (1) NM (1) 8.8 1.6
Hunterstown CCGT 810 7.0 91.6% 96.8% 1,593.9 1,594.2
Mountain 40 14.3 NM (1) NM (1) 4.7 2.0
Orrtanna 20 14.4 NM (1) NM (1) 1.2 0.2
Portland 169 11.2 NM (1) NM (1) 3.8 2.6
Sayreville 224 13.8 NM (1) NM (1) 4.4 1.5
Shawnee 20 14.0 NM (1) NM (1) 0.2 0.2
Shawville (2) 6 10.2 NM (1) NM (1) 0.1 0.1
Titus 31 17.4 NM (1) NM (1) - -
Tolna 39 14.2 NM (1) NM (1) 2.8 0.5
Warren 68 12.8 NM (1) NM (1) - -
Werner 212 13.8 NM (1) NM (1) 4.0 1.2
Shelby 356 9.8 NM (1) NM (1) 5.4 1.0
------- ------ ------ ------- -------
East Gas Total 3,957 92.0% 93.4% 1,691.7 1,638.4
======= ====== ====== ======= =======
(1) NM is not meaningful.
(2) The Company leases a 100% interest in the Shawville plant under a
facility lease agreement, which expires in 2026. The table includes our
net share of capacity for the gas units of this plant.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
West and Other
(Unaudited)
West
Net
Genera- Heat Q3 Total Margin Q3 Generation
ting Rate Capture Factor (GWh)
Capacity (MMBtu/ ------------------ -----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
-------- -------- ------ ------ -------- --------
Coolwater 622 10.1 NM (1) NM (1) 10.4 22.8
Ellwood (2) 54 13.3 NM (1) NM (1) - -
Etiwanda (2) 640 10.0 NM (1) NM (1) - -
Mandalay (2) 560 10.9 NM (1) NM (1) 55.9 94.0
Ormond Beach 1,516 9.6 NM (1) NM (1) 102.0 155.9
-------- ------- ------ -------- --------
West Total 3,392 97.9% 99.2% 168.3 272.7
======== ======= ====== ======== ========
Net
Genera- Heat Q3 YTD Total Margin Q3 YTD
ting Rate Capture Factor Generation (GWh)
Capacity (MMBtu/ ------------------ -----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
-------- -------- ------ ------ -------- --------
Coolwater 622 10.1 NM (1) NM (1) 11.2 38.9
Ellwood (2) 54 13.3 NM (1) NM (1) - -
Etiwanda (2) 640 10.0 NM (1) NM (1) - -
Mandalay (2) 560 10.9 NM (1) NM (1) 66.5 208.7
Ormond Beach 1,516 9.6 NM (1) NM (1) 117.1 250.1
-------- ------- ------ -------- --------
West Total 3,392 94.3% 95.1% 194.8 497.7
======== ======= ====== ======== ========
Other
Net
Genera- Heat Q3 Total Margin Q3 Generation
ting Rate Capture Factor (GWh)
Capacity (MMBtu/ ------------------ -----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
-------- -------- ------ ------ -------- --------
Choctaw 800 7.0 NM (1) NM (1) 356.6 11.6
Indian River
(2)(3) 587 10.5 NM (1) NM (1) - -
Osceola (2) 470 11.0 NM (1) NM (1) - -
Sabine (4) 54 N/A N/A N/A N/A N/A
Vandolah (5) 630 N/A N/A N/A N/A N/A
-------- ------- ------ -------- --------
Other Total 2,541 98.0% (1) NM (1) 356.6 11.6
======== ======= ====== ======== ========
Net
Genera- Heat Q3 YTD Total Margin Q3 YTD
ting Rate Capture Factor Generation (GWh)
Capacity (MMBtu/ ------------------ -----------------
Unit Name (MW) MWh) 2010 2009 2010 2009
-------- -------- ------ ------ -------- --------
Choctaw 800 7.0 NM (1) NM (1) 394.0 72.4
Indian River
(2)(3) 587 10.5 NM (1) NM (1) - -
Osceola (2) 470 11.0 NM (1) NM (1) - 1.5
Sabine (4) 54 N/A N/A N/A N/A N/A
Vandolah (5) 630 N/A N/A N/A N/A N/A
-------- ------- ------ -------- --------
Other Total 2,541 99.0% (1) NM (1) 394.0 73.9
======== ======= ====== ======== ========
(1) NM is not meaningful.
(2) Excludes generation during periods the unit operated under power
purchase agreements.
(3) This plant was mothballed in January 2010, other than during the third
quarter of 2010 where one unit serviced a power purchase agreement.
(4) We own 50% interest in this plant located in Texas (non-ERCOT) having
108 MW of net generating capacity. An unaffiliated party owns the other
50%. The table includes our net share of capacity of this plant.
(5) We are party to a tolling agreement entitling us to 100% of the
capacity of this Florida plant having 630 MW of net generating
capacity. This tolling agreement expires in 2012 and is treated as an
operating lease for accounting purposes.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
Capital Expenditures
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2010 2009 2010 2009
------- ------- ------- -------
(in millions) (in millions)
Maintenance capital
expenditures $ 4 $ 10 $ 24 $ 45
------- ------- ------- -------
Environmental capital
expenditures 10 25 32 91
Capitalized interest - 8 (1) 8 (2) 22 (1)
------- ------- ------- -------
Total environmental
capital expenditures
and capitalized
interest 10 33 40 113
------- ------- ------- -------
Total capital
expenditures $ 14 $ 43 $ 64 $ 158
======= ======= ======= =======
(1) Relates primarily to environmental capital expenditures for SO2
emission reductions at our Cheswick and Keystone plants, which are
included in our East Coal segment.
(2) Relates primarily to environmental capital expenditures for SO2
emission reductions at our Cheswick plant, which is included in our
East Coal segment.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
RRI Energy, Inc. and Subsidiaries
GAAP Debt, Gross Debt and Net Debt
(Unaudited)
September 30, December 31,
2010 2009 Change
------------- ------------- --------
(in millions)
Senior secured revolver $ - $ - $ -
Senior secured notes (1) 279 279 -
Senior unsecured notes 1,300 1,300 -
Orion Power 12% notes (2) - 405 (405)
PEDFA fixed-rate bonds for
Seward plant (1) 371 371 -
------------- ------------- --------
GAAP Debt $ 1,950 $ 2,355 $ (405)
Orion Power 12% notes
purchase accounting
adjustment - (5) 5
REMA operating leases
(off-balance sheet) 411 423 (12)
------------- ------------- --------
Gross Debt $ 2,361 $ 2,773 $ (412)
Cash and cash equivalents (781) (943) 162
Restricted cash (7) (24) 17
Net margin deposits and
cash collateral (137) (3) (260) (4) 123
------------- ------------- --------
Net Debt $ 1,436 $ 1,546 $ (110)
============= ============= ========
(1) Expected to be refinanced in connection with the proposed merger with
Mirant.
(2) Orion Power 12% notes include purchase accounting adjustment of
$5 million as of December 31, 2009. This debt was paid off in May 2010.
(3) Includes $15 million related to discontinued operations and $31 million
related to cash collateral.
(4) Includes $45 million related to discontinued operations and $20 million
related to cash collateral.
Reference is made to RRI Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2009
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