August 7, 2019 - 7:13 AM EDT
Print Email Article Font Down Font Up Charts

NRG Energy, Inc. Reports Second Quarter 2019 Results

PRINCETON, N.J.

  • Reaffirming 2019 guidance
  • Reduced debt by $600 million to achieve investment grade metrics
  • Announcing incremental $250 million share repurchase program
  • Closed Stream Energy acquisition
  • Executed approximately 1.3 GWs of solar power purchase agreements in ERCOT

 

NRG Energy, Inc. (NYSE:NRG) today reported second quarter 2019 income from continuing operations of $189 million, or $0.75 per diluted common share and Adjusted EBITDA for the second quarter of $469 million.

“Our platform performed well during both the quarter and first half of the year, demonstrating the stability of our integrated model,” said Mauricio Gutierrez, NRG President and Chief Executive Officer. "I am also pleased to announce that we have completed our deleveraging program, aligning our credit profile with investment grade metrics and enhancing our financial flexibility to create significant and sustainable shareholder value.”

Consolidated Financial Results

NRG completed the sale of its Renewables Platform, and its interests in Clearway Energy, as well as the South Central Portfolio, on August 31, 2018, and February 4, 2019, respectively. As a result, 2018 financial information for the sales were recast to reflect the presentation of these entities as discontinued operations.

 

 

Three Months Ended

 

Six Months Ended

($ in millions)

 

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Income from Continuing Operations

 

$

189

 

 

$

27

 

 

$

283

 

 

$

265

 

Cash provided by Continuing Operations

 

$

516

 

 

$

18

 

 

$

381

 

 

$

264

 

Adjusted EBITDA

 

$

469

 

 

$

517

 

 

$

801

 

 

$

853

 

Free Cash Flow Before Growth Investments (FCFbG)

 

$

230

 

 

$

174

 

 

$

204

 

 

$

216

 

Segment Results

Table 1: Income/(Loss) from Continuing Operations

($ in millions)

 

Three Months Ended

 

Six Months Ended

Segment

 

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Retail

 

$

(280

)

 

$

(84

)

 

$

(170

)

 

$

860

 

Generation a

 

618

 

 

252

 

 

731

 

 

(319

)

Corporate

 

(149

)

 

(141

)

 

(278

)

 

(276

)

Income from Continuing Operationsa

 

$

189

 

 

$

27

 

 

$

283

 

 

$

265

 

a. In accordance with GAAP, 2018 results have been recast to reflect the discontinued operations of the South Central Portfolio, Clearway Energy, the Renewables Platform and Carlsbad Energy Center.

Second quarter Income from Continuing Operations was $189 million, $162 million higher than second quarter 2018, driven by Generation gains on mark-to-market hedge positions in 2019 partially offset by Retail losses on mark-to-market hedge positions in 2019, both driven by large movements in gas prices and ERCOT heat rates.

Table 2: Adjusted EBITDA

($ in millions)

 

Three Months Ended

 

Six Months Ended

Segment

 

6/30/19

 

6/30/18

 

6/30/19

 

6/30/18

Retail

 

$

240

 

 

$

298

 

 

$

393

 

 

$

486

 

Generation a

 

230

 

 

231

 

 

414

 

 

385

 

Corporate

 

(1

)

 

(12

)

 

(6

)

 

(18

)

Adjusted EBITDA b

 

$

469

 

 

$

517

 

 

$

801

 

 

$

853

 

a. In accordance with GAAP, 2018 results have been recast to reflect the discontinued operations of the South Central Portfolio, Clearway Energy, the Renewables Platform and Carlsbad Energy Center.

b. See Appendices A-1 through A-4 for Operating Segment Reg G reconciliations.

Retail: Second quarter Adjusted EBITDA was $240 million, $58 million lower than second quarter 2018, driven by higher supply costs, milder weather and capacity obligations, partially offset by the acquisition of XOOM.

Generation: Second quarter Adjusted EBITDA was $230 million, $1 million lower than second quarter 2018, driven by:

  • Texas Region: $85 million increase due to higher generation and higher realized power prices; and
  • East/West1: $86 million decrease due to 2018 asset sales and deconsolidations combined with lower insurance proceeds and lower generation.

Liquidity and Capital Resources
Table 3: Corporate Liquidity

($ in millions)

 

6/30/19

 

12/31/18

Cash and Cash Equivalents

 

$

294

 

 

$

563

 

Restricted Cash

 

11

 

 

17

Total

 

$

305

 

 

$

580

 

Total credit facility availability

 

1,799

 

 

1,397

 

Total Liquidity, excluding collateral received

 

$

2,104

 

 

$

1,977

 

As of June 30, 2019, NRG cash was at $0.3 billion, and $1.8 billion was available under the Company’s credit facilities. Total liquidity was $2.1 billion, including restricted cash. Overall liquidity as of the end of the second quarter 2019 was $127 million higher than at the end of 2018 driven by asset sale proceeds, net of share repurchases and debt reductions executed during the period, and an increase in NRG's revolver capacity.

NRG Strategic Developments

Transformation Plan

Through the second quarter of 2019, NRG realized $261 million of its cost savings target as part of the previously announced Transformation Plan, and is on track to realize $590 million in savings in 2019. Margin Enhancement provided $30 million in uplift through the second quarter toward the $135 million 2019 target.

Retail Acquisition

On May 15, 2019, NRG entered into an agreement to acquire Stream Energy's retail electricity and natural gas business operating in 9 states and Washington, D.C. for $300 million and estimated transaction costs and working capital adjustments of approximately $25 million. The acquisition increased NRG's retail portfolio by approximately 600,000 Retail Customer Equivalents or 450,000 customers. The acquisition closed on August 1, 2019.

Renewable Power Purchase Agreements

During the first half of 2019, NRG began execution of its capital-light strategy to provide competitively priced renewable offerings to retail customers. NRG entered into power purchase agreements with third-party project developers and other counterparties, totaling approximately 1.3 GWs, with an average tenor of approximately ten years. NRG expects to continue evaluating and executing agreements such as these that support the needs of its platform.

Pre-Summer Maintenance and Gregory Natural Gas Plant

NRG expanded pre-summer maintenance of the Texas fleet by increasing spending by $21 million, including the return of its 385 MW Gregory natural gas plant in Corpus Christi, Texas to service in June 2019.

2019 Guidance

NRG is reaffirming its guidance range for 2019 with respect to Adjusted EBITDA, Cash From Operations and Free Cash Flow before Growth Investments (FCFbG) as set forth below.

Table 4: 2019 Adjusted EBITDA, Cash from Operations, and FCFbG Guidance

 

2019

($ in millions)

Guidance

Adjusted EBITDAa

$1,850-$2,050

Adjusted Cash From Operations

$1,405-$1,605

FCFbG

$1,250-$1,450

a. Non-GAAP financial measure; see Appendix Tables A-8 for GAAP Reconciliation to Net Income that excludes fair value adjustments related to derivatives. The Company is unable to provide guidance for Net Income due to the impact of such fair value adjustments related to derivatives in a given year

Capital Allocation Update

Through August 7, 2019, NRG completed $1.25 billion in share repurchases, including the $1 billion share repurchase program announced on the fourth quarter 2018 earnings call, at an average price of $38.80 per share2.

In addition, the Board of Directors of the Company has authorized an incremental $250 million share repurchase program, which is expected to be executed in 2019. In total, NRG has allocated $1.5 billion of capital available for allocation to share repurchases in 2019.

During the second quarter of 2019, NRG completed several debt transactions to extend maturities, reduce interest expense and further align its credit profile with investment grade:

  • Refinanced $733 million of 6.25% Senior Unsecured Notes due 2024 with new 5.25% Senior Unsecured Notes due 2029
  • Issued $1.1 billion of aggregate principal amount of Senior Secured First Lien Notes, consisting of $600 million 3.75% Senior Secured First Lien Notes due 2024 and $500 million 4.45% Senior Secured First Lien Notes due 2029. The proceeds from the issuance of the Senior Secured First Lien Notes, as well as $598 million3 of cash on hand, were used to repay the Company's $1.7 billion 2023 Term Loan facility
  • Amended its existing credit agreement, increasing the aggregate revolving commitments by $184 million to $2.6 billion, extending the maturity to 2024, and reducing the borrowing costs by 0.5%, among other modifications

Both the new secured notes and amended credit facility provide for a release of the collateral securing the debt if NRG obtains an investment grade rating from two out of the three rating agencies. In aggregate, these transactions will generate annual interest savings of approximately $25 million.

On July 19, 2019, NRG declared a quarterly dividend on the Company's common stock of $0.03 per share, payable August 15, 2019, to stockholders of record as of August 1, 2019, representing $0.12 on an annualized basis.

The Company’s common stock dividend, debt reduction and share repurchases are subject to available capital, market conditions and compliance with associated laws and regulations.

1 Includes International and Renewables

2 As of August 7, 2019, 252,987,889 shares outstanding

3 Includes $4 million of term loan amortization

Earnings Conference Call

On August 7, 2019, NRG will host a conference call at 9:00 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” then "Presentations & Webcasts." The webcast will be archived on the site for those unable to listen in real time.

About NRG

At NRG, we’re bringing the power of energy to people and organizations, putting customers at the center of everything we do. We generate electricity and provide energy solutions and natural gas to more than 3.5 million residential, small business, and commercial and industrial customers through our diverse portfolio of retail brands. A Fortune 500 company, operating in the United States and Canada, NRG delivers innovative solutions while advocating for competitive energy markets and customer choice, and by working towards a sustainable energy future. More information is available at www.nrg.com. Connect with NRG on Facebook, LinkedIn and follow us on Twitter @nrgenergy, @nrginsight.

Forward-Looking Statements

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, 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, cyberterrorism and inadequate cybersecurity, 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 and margin enhancement, our ability to achieve our net debt targets, our ability to achieve investment grade credit metrics, our ability to proceed with projects under development or the inability to complete the construction of such projects on schedule or within budget, 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, 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, and our ability to execute our Capital Allocation Plan. Achieving investment grade credit metrics is not a indication of or guarantee that the Company will receive investment grade credit ratings. 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, free cash flow guidance and excess cash guidance are estimates as of August 7, 2019. 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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

 

Three months ended
June 30,

 

Six months ended
June 30,

(In millions, except for per share amounts)

2019

 

2018

 

2019

 

2018

Operating Revenues

 

 

 

 

 

 

 

Total operating revenues

$

2,465

 

 

$

2,461

 

 

$

4,630

 

 

$

4,526

 

Operating Costs and Expenses

 

 

 

 

 

 

 

Cost of operations

1,845

 

 

1,889

 

 

3,496

 

 

3,274

 

Depreciation and amortization

85

 

 

112

 

 

170

 

 

232

 

Impairment losses

1

 

 

74

 

 

1

 

 

74

 

Selling, general and administrative

211

 

 

200

 

 

405

 

 

376

 

Reorganization costs

2

 

 

23

 

 

15

 

 

43

 

Development costs

2

 

 

3

 

 

4

 

 

8

 

Total operating costs and expenses

2,146

 

 

2,301

 

 

4,091

 

 

4,007

 

Gain on sale of assets

1

 

 

14

 

 

2

 

 

16

 

Operating Income

320

 

 

174

 

 

541

 

 

535

 

Other Income/(Expense)

 

 

 

 

 

 

 

Equity in earnings/(losses) of unconsolidated affiliates

 

 

5

 

 

(21

)

 

6

 

Other income/(expense), net

20

 

 

(23

)

 

32

 

 

(23

)

Loss on debt extinguishment, net

(47

)

 

(1

)

 

(47

)

 

(3

)

Interest expense

(105

)

 

(123

)

 

(219

)

 

(239

)

Total other expense

(132

)

 

(142

)

 

(255

)

 

(259

)

Income from Continuing Operations Before Income Taxes

188

 

 

32

 

 

286

 

 

276

 

Income tax (benefit)/expense

(1

)

 

5

 

 

3

 

 

11

 

Income from Continuing Operations

189

 

 

27

 

 

283

 

 

265

 

Income from discontinued operations, net of income tax

13

 

 

69

 

 

401

 

 

64

 

Net Income

202

 

 

96

 

 

684

 

 

329

 

Less: Net income/(loss) attributable to noncontrolling interest and redeemable interests

1

 

 

24

 

 

1

 

 

(22

)

Net Income Attributable to NRG Energy, Inc

$

201

 

 

$

72

 

 

683

 

 

351

 

Earnings per Share Attributable to NRG Energy, Inc.

 

 

 

 

 

 

 

Weighted average number of common shares outstanding — basic

265

 

 

310

 

 

272

 

 

314

 

Income from continuing operations per weighted average common share — basic

$

0.71

 

 

$

0.01

 

 

$

1.04

 

 

$

0.92

 

Income from discontinued operations per weighted average common share — basic

$

0.05

 

 

$

0.22

 

 

$

1.47

 

 

$

0.20

 

Earnings per Weighted Average Common Share — Basic

$

0.76

 

 

$

0.23

 

 

$

2.51

 

 

$

1.12

 

Weighted average number of common shares outstanding — diluted

267

 

 

314

 

 

274

 

 

318

 

Income from continuing operations per weighted average common share — diluted.

$

0.70

 

 

$

0.01

 

 

$

1.03

 

 

$

0.90

 

Income from discontinued operations per weighted average common share — diluted

$

0.05

 

 

$

0.22

 

 

$

1.46

 

 

$

0.20

 

Earnings per Weighted Average Common Share — Diluted

$

0.75

 

 

$

0.23

 

 

$

2.49

 

 

$

1.10

 

Dividends Per Common Share

$

0.03

 

 

$

0.03

 

 

$

0.06

 

 

$

0.06

 

 

 

 

NRG ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

 

 

Three months ended June 30,

 

Six months ended June 30,

 

2019

 

2018

 

2019

 

2018

 

(In millions)

Net Income

$

202

 

 

$

96

 

 

$

684

 

 

$

329

 

Other Comprehensive (Loss)/Income

 

 

 

 

 

 

 

Unrealized gain on derivatives

 

 

5

 

 

 

 

19

 

Foreign currency translation adjustments

(1

)

 

(4

)

 

 

 

(6

)

Available-for-sale securities

1

 

 

1

 

 

1

 

 

1

 

Defined benefit plans

(3

)

 

(1

)

 

(6

)

 

(2

)

Other comprehensive (loss)/income

(3

)

 

1

 

 

(5

)

 

12

 

Comprehensive Income

199

 

 

97

 

 

679

 

 

341

 

Less: Comprehensive income/(loss) attributable to noncontrolling interest and redeemable noncontrolling interest

1

 

 

26

 

 

1

 

 

(12

)

Comprehensive Income Attributable to NRG Energy, Inc.

$

198

 

 

$

71

 

 

$

678

 

 

$

353

 

 

 

NRG ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

June 30, 2019

 

December 31, 2018

(In millions, except share data)

(Unaudited)

 

 

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

$

294

 

 

$

563

 

Funds deposited by counterparties

31

 

 

33

 

Restricted cash

11

 

 

17

 

Accounts receivable, net

1,049

 

 

1,024

 

Inventory

370

 

 

412

 

Derivative instruments

850

 

 

764

 

Cash collateral paid in support of energy risk management activities

163

 

 

287

 

Prepayments and other current assets

277

 

 

302

 

Current assets - held-for-sale

 

 

1

 

Current assets - discontinued operations

 

 

197

 

Total current assets

3,045

 

 

3,600

 

Property, plant and equipment, net

2,610

 

 

3,048

 

Other Assets

 

 

 

Equity investments in affiliates

383

 

 

412

 

Operating lease right-of-use assets, net

499

 

 

 

Goodwill

573

 

 

573

 

Intangible assets, net

561

 

 

591

 

Nuclear decommissioning trust fund

748

 

 

663

 

Derivative instruments

426

 

 

317

 

Deferred income taxes

55

 

 

46

 

Other non-current assets

271

 

 

289

 

Non-current assets - held-for-sale

 

 

77

 

Non-current assets - discontinued operations

 

 

1,012

 

Total other assets

3,516

 

 

3,980

 

Total Assets

$

9,171

 

 

$

10,628

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current Liabilities

 

 

 

Current portion of long-term debt and capital leases

$

87

 

 

$

72

 

Current portion of operating lease liabilities

74

 

 

 

Accounts payable

723

 

 

863

 

Derivative instruments

778

 

 

673

 

Cash collateral received in support of energy risk management activities

31

 

 

33

 

Accrued expenses and other current liabilities

601

 

 

680

 

Current liabilities - held-for-sale

 

 

5

 

Current liabilities - discontinued operations

 

 

72

 

Total current liabilities

2,294

 

 

2,398

 

Other Liabilities

 

 

 

Long-term debt and capital leases

5,794

 

 

6,449

 

Non-current operating lease liabilities

513

 

 

 

Nuclear decommissioning reserve

290

 

 

282

 

Nuclear decommissioning trust liability

448

 

 

371

 

Derivative instruments

374

 

 

304

 

Deferred income taxes

71

 

 

65

 

Other non-current liabilities

1,016

 

 

1,274

 

Non-current liabilities - held-for-sale

 

 

65

 

Non-current liabilities - discontinued operations

 

 

635

 

Total other liabilities

8,506

 

 

9,445

 

Total Liabilities

10,800

 

 

11,843

 

Redeemable noncontrolling interest in subsidiaries

19

 

 

19

 

Commitments and Contingencies

 

 

 

Stockholders' Equity

 

 

 

Common stock; $0.01 par value; 500,000,000 shares authorized; 421,830,474 and 420,288,886 shares issued and 258,570,598 and 283,650,039 shares outstanding at June 30, 2019 and December 31, 2018, respectively

4

 

 

4

 

Additional paid-in-capital

8,488

 

 

8,510

 

Accumulated deficit

(5,355

)

 

(6,022

)

Less treasury stock, at cost - 163,259,876 and 136,638,847 shares at June 30, 2019 and December 31, 2018, respectively

(4,686

)

 

(3,632

)

Accumulated other comprehensive loss

(99

)

 

(94

)

Total Stockholders' Equity

(1,648

)

 

(1,234

)

Total Liabilities and Stockholders' Equity

$

9,171

 

 

$

10,628

 

 

 

NRG ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

 

Six months ended June 30,

(In millions)

2019

 

2018

Cash Flows from Operating Activities

 

 

 

Net Income

$

684

 

 

$

329

 

Income from discontinued operations, net of income tax.

401

 

 

64

 

Net income from continuing operations.

283

 

 

265

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

Distributions and equity earnings of unconsolidated affiliates

22

 

 

12

 

Depreciation, amortization and accretion

184

 

 

252

 

Provision for bad debts

52

 

 

30

 

Amortization of nuclear fuel

27

 

 

24

 

Amortization of financing costs and debt discount/premiums

13

 

 

13

 

Adjustment for debt extinguishment

47

 

 

3

 

Amortization of intangibles and out-of-market contracts

14

 

 

20

 

Amortization of unearned equity compensation

10

 

 

15

 

Loss/(gain) on sale and disposal of assets

1

 

 

(16

)

Impairment losses

1

 

 

88

 

Changes in derivative instruments

(22

)

 

(145

)

Changes in deferred income taxes and liability for uncertain tax benefits

(5

)

 

(2

)

Changes in collateral deposits in support of energy risk management activities

125

 

 

(9

)

Changes in nuclear decommissioning trust liability

17

 

 

41

 

Loss on deconsolidation of Ivanpah project

 

 

22

 

Changes in other working capital

(388

)

 

(349

)

Cash provided by continuing operations

381

 

 

264

 

Cash provided by discontinued operations

8

 

 

249

 

Net Cash Provided by Operating Activities

389

 

 

513

 

Cash Flows from Investing Activities

 

 

 

Payments for acquisitions of businesses

(21

)

 

(211

)

Capital expenditures

(107

)

 

(282

)

Net proceeds from sale of emission allowances

(1

)

 

3

 

Investments in nuclear decommissioning trust fund securities

(209

)

 

(346

)

Proceeds from the sale of nuclear decommissioning trust fund securities

191

 

 

303

 

Proceeds from sale of assets, net of cash disposed and sale of discontinued operations, net of fees

1,289

 

 

146

 

Deconsolidation of Ivanpah project

 

 

(160

)

Changes in investments in unconsolidated affiliates

7

 

 

(15

)

Contributions to discontinued operations

(44

)

 

(16

)

Cash provided/(used) by continuing operations

1,105

 

 

(578

)

Cash used by discontinued operations

(2

)

 

(584

)

Net Cash Provided/(Used) by Investing Activities

1,103

 

 

(1,162

)

Cash Flows from Financing Activities

 

 

 

Payments of dividends to common stockholders

(16

)

 

(19

)

Payments for treasury stock

(1,039

)

 

(500

)

Payments for debt extinguishment costs

(24

)

 

 

Distributions to noncontrolling interests from subsidiaries

(1

)

 

(14

)

Proceeds from issuance of common stock

2

 

 

11

 

Proceeds from issuance of short and long-term debt

1,833

 

 

994

 

Payment of debt issuance costs

(33

)

 

(19

)

Payments for short and long-term debt

(2,485

)

 

(348

)

Cash (used)/provided by continuing operations

(1,763

)

 

105

 

Cash provided by discontinued operations

43

 

 

345

 

Net Cash (Used)/Provided by Financing Activities

(1,720

)

 

450

 

Change in Cash from discontinued operations

49

 

 

10

 

Net Decrease in Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash.

(277

)

 

(209

)

Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at Beginning of Period

613

 

 

1,086

 

Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at End of Period

$

336

 

 

$

877

 

Appendix Table A-1: Second Quarter 2019 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the calculation of Adj. EBITDA and provides a reconciliation to income/(loss) from continuing operations:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Income/(Loss) from Continuing Operations

539

 

79

 

618

 

(280

)

(149

)

189

 

Plus:

 

 

 

 

 

 

Interest expense, net

 

6

 

6

 

1

 

92

 

99

 

Income tax

 

 

 

1

 

(2

)

(1

)

Loss on debt extinguishment

 

 

 

 

47

 

47

 

Depreciation and amortization

22

 

23

 

45

 

32

 

8

 

85

 

ARO Expense

3

 

4

 

7

 

 

 

7

 

Contract amortization

6

 

 

6

 

 

 

6

 

EBITDA

570

 

112

 

682

 

(246

)

(4

)

432

 

Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates

5

 

28

 

33

 

 

 

33

 

Acquisition-related transaction & integration costs

 

 

 

 

1

 

1

 

Reorganization costs

 

 

 

2

 

 

2

 

Legal Settlement

3

 

8

 

11

 

 

 

11

 

Deactivation costs

 

7

 

7

 

 

2

 

9

 

Other non recurring charges

 

2

 

2

 

(1

)

 

1

 

Impairments

 

 

 

1

 

 

1

 

Mark to market (MtM) (gains)/losses on economic hedges

(444

)

(61

)

(505

)

484

 

 

(21

)

Adjusted EBITDA

134

 

96

 

230

 

240

 

(1

)

469

 

1 Includes International, remaining renewables and Generation eliminations

Second Quarter 2019 condensed financial information by Operating Segment:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Operating revenues

513

 

330

 

843

 

1,746

 

(365

)

2,224

 

Cost of sales

226

 

124

 

350

 

1,288

 

(365

)

1,273

 

Economic gross margin2

287

 

206

 

493

 

458

 

 

951

 

Operations & maintenance and other cost of operations3

130

 

125

 

255

 

83

 

(1

)

337

 

Selling, marketing, general and administrative4

29

 

31

 

60

 

135

 

5

 

200

 

Other expense/(income)5

(6

)

(46

)

(52

)

 

(3

)

(55

)

Adjusted EBITDA

134

 

96

 

230

 

240

 

(1

)

469

 

1 Includes International, remaining renewables and Generation eliminations

2 Excludes MtM gain of $21 million and contract amortization of $6 million

3 Excludes deactivation costs of $9 million

4 Excludes legal settlement of $11 million

5 Excludes acquisition-related transaction & integration costs of $1 million, reorganization costs of $2 million and loss on debt extinguishment of $47 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
financial
information

Interest, tax,
depr., amort.

MtM

Deactivation

Other adj.

Adjusted
EBITDA

Operating revenues

2,465

 

 

(241

)

 

 

2,224

 

Cost of operations

1,499

 

(6

)

(220

)

 

 

1,273

 

Gross margin

966

 

6

 

(21

)

 

 

951

 

Operations & maintenance and other cost of operations

346

 

 

 

(9

)

 

337

 

Selling, marketing, general & administrative1

211

 

 

 

 

(11

)

200

 

Other expense/(income)2

220

 

(190

)

 

 

(85

)

(55

)

Income/(Loss) from Continuing Operations

189

 

196

 

(21

)

9

 

96

 

469

 

1 Other adj. includes legal settlement of $11 million

2 Other adj. includes impairments of $1 million, acquisition-related transaction & integration costs of $1 million, reorganization costs of $2 million and loss on debt extinguishment of $47 million

Appendix Table A-2: Second Quarter 2018 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to income/(loss) from continuing operations:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Income/(Loss) from Continuing Operations

286

 

(34

)

252

 

(84

)

(141

)

27

 

Plus:

 

 

 

 

 

 

Interest expense, net

 

15

 

15

 

1

 

105

 

121

 

Income tax

 

1

 

1

 

 

4

 

5

 

Loss on debt extinguishment

 

 

 

 

1

 

1

 

Depreciation and amortization

21

 

53

 

74

 

30

 

8

 

112

 

ARO Expense

4

 

4

 

8

 

 

1

 

9

 

Contract amortization

7

 

 

7

 

 

 

7

 

Lease amortization

 

(2

)

(2

)

 

 

(2

)

EBITDA

318

 

37

 

355

 

(53

)

(22

)

280

 

Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates

3

 

15

 

18

 

 

 

18

 

Acquisition-related transaction & integration costs

 

 

 

1

 

 

1

 

Reorganization costs

1

 

2

 

3

 

1

 

19

 

23

 

Legal Settlement

13

 

 

13

 

 

6

 

19

 

Deactivation costs

 

7

 

7

 

 

3

 

10

 

Gain on sale of business

 

 

 

 

(16

)

(16

)

Other non recurring charges

 

 

4

 

4

 

3

 

(3

)

4

 

Impairments

6

 

95

 

101

 

 

1

 

102

 

Mark to market (MtM) (gains)/losses on economic hedges

(293

)

23

 

(270

)

346

 

 

76

 

Adjusted EBITDA

48

 

183

 

231

 

298

 

(12

)

517

 

1 Includes International, remaining renewables and Generation eliminations

Second Quarter 2018 condensed financial information by Operating Segment:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Operating revenues

412

 

481

 

893

 

1,814

 

(256

)

2,451

 

Cost of sales

223

 

165

 

388

 

1,318

 

(254

)

1,452

 

Economic gross margin2

189

 

316

 

505

 

496

 

(2

)

999

 

Operations & maintenance and other cost of operations3

138

 

125

 

263

 

75

 

(5

)

333

 

Selling, marketing, general & administrative4

12

 

33

 

45

 

125

 

11

 

181

 

Other expense/(income)5

(9

)

(25

)

(34

)

(2

)

4

 

(32

)

Adjusted EBITDA

 

48

 

183

 

231

 

298

 

(12

)

517

 

1 Includes International, remaining renewables and Generation eliminations

2 Excludes MtM loss of $76 million and contract amortization of $7 million

3 Excludes deactivation costs of $10 million

4 Excludes legal settlement of $19 million

5 Excludes gain on sale of business of $16 million, acquisition-related transaction & integration costs of $1 million, reorganization costs of $23 million and loss on debt extinguishment of $1 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
financial
information

Interest, tax,
depr., amort.

MtM

Deactivation

Other
adj.

Adjusted
EBITDA

Operating revenues

2,461

 

 

(10

)

 

 

2,451

 

Cost of operations

1,545

 

(7

)

(86

)

 

 

1,452

 

Gross margin

916

 

7

 

76

 

 

 

999

 

Operations & maintenance and other cost of operations

343

 

 

 

(10

)

 

333

 

Selling, marketing, general & administrative1

200

 

 

 

 

(19

)

181

 

Other expense/(income)2

346

 

(245

)

 

 

(133

)

(32

)

Income/(Loss) from Continuing Operations

27

 

252

 

76

 

10

 

152

 

517

 

1 Other adj. includes legal settlement of $19 million

2 Other adj. includes impairments of $102 million, gain on sale of business of $16 million, acquisition-related transaction & integration costs of $1 million, reorganization costs of $23 million and loss on debt extinguishment of $1 million

Appendix Table A-3: YTD Second Quarter 2019 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the calculation of Adj. EBITDA and provides a reconciliation to income/(loss) from continuing operations:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Income/(Loss) from Continuing Operations

582

 

149

 

731

 

(170

)

(278

)

283

 

Plus:

 

 

 

 

 

 

Interest expense, net

 

13

 

13

 

1

 

192

 

206

 

Income tax

 

1

 

1

 

1

 

1

 

3

 

Loss on debt extinguishment

 

 

 

 

47

 

47

 

Depreciation and amortization

43

 

48

 

91

 

63

 

16

 

170

 

ARO Expense

7

 

7

 

14

 

 

 

14

 

Contract Amortization

11

 

 

11

 

 

 

11

 

EBITDA

643

 

218

 

861

 

(105

)

(22

)

734

 

Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates

8

 

57

 

65

 

 

 

65

 

Acquisition-related transaction & integration costs

 

 

 

1

 

 

1

 

Reorganization costs

 

1

 

1

 

3

 

11

 

15

 

Legal Settlement

3

 

8

 

11

 

 

 

11

 

Deactivation costs

 

8

 

8

 

 

5

 

13

 

Other non recurring charges

 

(1

)

2

 

1

 

1

 

 

2

 

Impairments

 

 

 

1

 

 

1

 

Market to market (MtM) (gains)/losses on economic hedges

(475

)

(58

)

(533

)

492

 

 

(41

)

Adjusted EBITDA

178

 

236

 

414

 

393

 

(6

)

801

 

1 Includes International, remaining renewables and Generation eliminations

YTD Second Quarter 2019 condensed financial information by Operating Segment:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Operating revenues

900

 

761

 

1,661

 

3,353

 

(645

)

4,369

 

Cost of sales

421

 

313

 

734

 

2,523

 

(643

)

2,614

 

Economic gross margin2

479

 

448

 

927

 

830

 

(2

)

1,755

 

Operations & maintenance and other cost of operations3

260

 

217

 

477

 

163

 

(2

)

638

 

Selling, marketing, general & administrative4

52

 

54

 

106

 

277

 

11

 

394

 

Other expense/(income)5

(11

)

(59

)

(70

)

(3

)

(5

)

(78

)

Adjusted EBITDA

178

 

236

 

414

 

393

 

(6

)

801

 

1 Includes International, remaining renewables and Generation eliminations

2 Excludes MtM gain of $41 million and contract amortization of $11 million

3 Excludes deactivation costs of $13 million

4 Excludes legal settlement of $11 million

5 Excludes acquisition-related transaction & integration costs of $1 million, reorganization costs of $15 million and loss on debt extinguishment of $47 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
financial
information

Interest, tax,
depr., amort.

MtM

Deactivation

Other adj.

Adjusted
EBITDA

Operating revenues

4,630

 

 

(261

)

 

 

4,369

 

Cost of operations

2,845

 

(11

)

(220

)

 

 

2,614

 

Gross margin

1,785

 

11

 

(41

)

 

 

1,755

 

Operations & maintenance and other cost of operations

651

 

 

 

(13

)

 

638

 

Selling, marketing, general & administrative1

405

 

 

 

 

(11

)

394

 

Other expense/(income)2

446

 

(393

)

 

 

(131

)

(78

)

Income/(Loss) from Continuing Operations

283

 

404

 

(41

)

13

 

142

 

801

 

1 Other adj. includes legal settlement of $11 million

2 Other adj. includes impairments of $1 million, acquisition-related transaction & integration costs of $1 million, reorganization costs of $15 million and loss on debt extinguishment of $47 million

Appendix Table A-4: YTD Second Quarter 2018 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to income/(loss) from continuing operations:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Income/(Loss) from Continuing Operations

(314

)

(5

)

(319

)

860

 

(276

)

265

 

Plus:

 

 

 

 

 

 

Interest expense, net

 

36

 

36

 

2

 

195

 

233

 

Income tax

 

 

 

 

11

 

11

 

Loss on debt extinguishment

 

 

 

 

3

 

3

 

Depreciation and amortization

42

 

118

 

160

 

56

 

16

 

232

 

ARO Expense

11

 

8

 

19

 

 

1

 

20

 

Contract Amortization

12

 

1

 

13

 

 

 

13

 

Lease amortization

 

(4

)

(4

)

 

 

(4

)

EBITDA

(249

)

154

 

(95

)

918

 

(50

)

773

 

Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates

2

 

23

 

25

 

 

1

 

26

 

Acquisition-related transaction & integration costs

 

 

 

1

 

4

 

5

 

Reorganization costs

2

 

4

 

6

 

5

 

32

 

43

 

Legal Settlement

13

 

 

13

 

 

6

 

19

 

Deactivation costs

 

10

 

10

 

 

5

 

15

 

Gain on sale of business

 

1

 

1

 

 

(17

)

(16

)

Other non recurring charges

 

 

5

 

5

 

2

 

 

7

 

Impairments

15

 

95

 

110

 

 

1

 

111

 

MtM (gains)/losses on economic hedges

278

 

32

 

310

 

(440

)

 

(130

)

Adjusted EBITDA

61

 

324

 

385

 

486

 

(18

)

853

 

1 Includes International, remaining renewables and Generation eliminations

YTD Second Quarter 2018 condensed financial information by Operating Segment:

($ in millions)

Texas

East/
West1

Generation

Retail

Corp/
Elim

Total

Operating revenues

730

 

1,008

 

1,738

 

3,300

 

(426

)

4,612

 

Cost of sales

373

 

393

 

766

 

2,428

 

(419

)

2,775

 

Economic gross margin2

357

 

615

 

972

 

872

 

(7

)

1,837

 

Operations & maintenance and other cost of operations3

279

 

269

 

548

 

146

 

(7

)

687

 

Selling, marketing, general & administrative4

35

 

62

 

97

 

240

 

20

 

357

 

Other expense/(income)5

(18

)

(40

)

(58

)

 

(2

)

(60

)

Adjusted EBITDA

61

 

324

 

385

 

486

 

(18

)

853

 

1 Includes International, remaining renewables and Generation eliminations

2 Excludes MtM gain of $130 million and contract amortization of $13 million

3 Excludes deactivation costs of $15 million

4 Excludes legal settlement of $19 million

5 Excludes gain on sale of business of $16 million, acquisition-related transaction & integration costs of $5 million, reorganization costs of $43 million and loss on debt extinguishment of $3 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
financial
information

Interest, tax,
depr., amort.

MtM

Deactivation

Other adj.

Adjusted
EBITDA

Operating revenues

4,526

 

 

86

 

 

 

4,612

 

Cost of operations

2,572

 

(13

)

216

 

 

 

2,775

 

Gross margin

1,954

 

13

 

(130

)

 

 

1,837

 

Operations & maintenance and other cost of operations

702

 

 

 

(15

)

 

687

 

Selling, marketing, general & administrative

376

 

 

 

 

(19

)

357

 

Other expense/(income) 1

611

 

(492

)

 

 

(179

)

(60

)

Income/(Loss) from Continuing Operations

265

 

505

 

(130

)

15

 

198

 

853

 

1 Other adj. includes legal settlement of $19 million

2 Other adj. includes impairments of $111 million, gain on sale of business of $16 million, acquisition-related transaction & integration costs of $5 million, reorganization costs of $43 million and loss on debt extinguishment of $3 million

Appendix Table A-5: 2019 and 2018 Three Months and Six Months Ended December 31 Adjusted Cash Flow from Operations Reconciliations
The following table summarizes the calculation of adjusted cash flow operating activities providing a reconciliation to net cash provided by operating activities:

 

 

Three Months Ended

($ in millions)

 

June 30, 2019

 

June 30, 2018

Net Cash Provided by Operating Activities

 

516

 

 

18

 

Merger, integration and cost-to-achieve expenses1

 

2

 

 

22

 

Adjustment for change in collateral

 

(246

)

 

182

 

Adjusted Cash Flow from Operating Activities

 

272

 

 

222

 

Maintenance CapEx, net

 

(41

)

 

(45

)

Environmental CapEx, net

 

$

(1

)

 

 

Distributions to non-controlling interests

 

 

 

(3

)

Free Cash Flow Before Growth Investments (FCFbG)

 

230

 

 

174

 

 

1 2019 and 2018 includes cost-to-achieve expenses associated with the Transformation Plan announced on July 2017 call

 

 

Six Months Ended

($ in millions)

 

June 30, 2019

 

June 30, 2018

Net Cash Provided by Operating Activities

 

381

 

 

264

 

Merger, integration and cost-to-achieve expenses1

 

18

 

 

44

 

Sale of Land

 

 

 

3

 

GenOn Settlement2

 

5

 

 

 

Adjustment for change in collateral

 

(123

)

 

18

 

Adjusted Cash Flow from Operating Activities

 

282

 

 

329

 

Maintenance CapEx, net

 

(76

)

 

(100

)

Environmental CapEx, net

 

(2

)

 

 

Distributions to non-controlling interests

 

 

 

(13

)

Free Cash Flow Before Growth Investments (FCFbG)

 

204

 

 

216

 

1 2019 and 2018 includes cost-to-achieve expenses associated with the Transformation Plan announced on July 2017 call

2 2019 includes final restructuring fee of $5 million

Appendix Table A-6: Second Quarter YTD 2019 Sources and Uses of Liquidity

The following table summarizes the sources and uses of liquidity through second quarter of 2019:

($ in millions)

Six Months Ended
June 30, 2019

Sources:

 

Adjusted cash flow from operations

282

 

Increase in credit facility

402

 

Collateral1

125

 

Asset sales

1,289

 

Uses:

 

Share repurchases

(1,039

)

Debt Repayment, net of proceeds

(652

)

Financing Fees - Debt issuance and Debt extinguishment costs

(57

)

Growth investments and acquisitions, net

(60

)

GenOn Settlement (Final Restructuring Fee)

(5

)

Maintenance and Environmental CapEx, net

(78

)

Cost-to-achieve expenses2

(45

)

Common Stock Dividends

(16

)

Other Investing and Financing

(19

)

 

 

Change in Total Liquidity

127

 

1 Excludes impact of Funds deposited by counterparties

2 Includes capital expenditures associated with the Transformation Plan

Appendix Table A-7: 2019 Adjusted EBITDA Guidance Reconciliation
The following table summarizes the calculation of Adjusted EBITDA providing reconciliation to Income from Continuing Operations:

 

 

2019 Guidance

($ in millions)

 

Low

 

High

Income from Continuing Operations 1

 

940

 

 

 

1,140

 

 

Income Tax

 

15

 

 

 

15

 

 

Interest Expense

 

335

 

 

 

335

 

 

Depreciation, Amortization, Contract Amortization and ARO Expense

 

430

 

 

 

430

 

 

Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates

 

80

 

 

 

80

 

 

Other Costs 2

 

50

 

 

 

50

 

 

Adjusted EBITDA

 

1,850

 

 

 

2,050

 

 

1 For purposes of guidance, discontinued operations are excluded and fair value adjustments related to derivatives are assumed to be zero

2 Includes deactivation costs and cost-to-achieve expenses

Appendix Table A-8: 2019 FCFbG Guidance Reconciliation
The following table summarizes the calculation of Free Cash Flow before Growth providing reconciliation to Cash from Operations:

 

 

 

 

 

2019

($ in millions)

 

Guidance

Adjusted EBITDA

 

$1,850 - $2,050

Interest payments

 

(335

)

Income tax

 

(15

)

Working capital / other assets and liabilities

 

(145

)

Cash From Operations

 

$1,355 - $1,555

Adjustments: Acquired Derivatives, Cost-to-Achieve, Return of Capital Dividends, Collateral and Other

 

50

 

Adjusted Cash flow from Operations

 

$1,405 - $1,605

Maintenance capital expenditures, net

 

(145) - (165)

Environmental capital expenditures, net

 

(0) - (5)

Free Cash Flow before Growth

 

$1,250 - $1,450

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) 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 as a measure of cash available for discretionary expenditures.

Free Cash Flow before Growth is utilized by Management in making decisions regarding the allocation of capital. Free Cash Flow before Growth 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 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.

Media:
Candice Adams
609.524.5428

Investors:
Kevin L. Cole, CFA
609.524.4526

 


Source: Business Wire (August 7, 2019 - 7:13 AM EDT)

News by QuoteMedia
www.quotemedia.com

Legal Notice