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NRG Energy, Inc. Reports Full-Year And Fourth Quarter Results; Increases Merger Synergies; Increases Dividend And Announces Share Buyback Program

Alternative Energy: Full-year adjusted EBITDA totaled $52 million, up $67 million from 2011. Solar gross margin was $117 million, a $106 million increase driven by the addition of the Company’s Agua Caliente solar facility, which as of December 31, 2012 had reached commercial operations on 253 MW, and the addition of the Roadrunner facility, which began commercial operations in late 2011. Offsetting the improved margin were NRG’s continued development efforts in new businesses.

Fourth-quarter adjusted EBITDA was $17 million; $23 million higher than the fourth quarter 2011. Solar gross margin was $30 million, a $26 million increase driven by the addition of the Company’s Agua Caliente solar facility, which had $19 million in gross margin and CVSR which had $2 million in gross margin in the fourth quarter of 2012.

GenOn stand-alone results: Full-year adjusted EBITDA for GenOn totaled $543 million. This calculation is based on GenOn’s previous methodology. See appendix for a detailed reconciliation.

Liquidity and Capital Resources
                             

Table 3: Corporate Liquidity
($ in millions)           12/31/12           9/30/12           12/31/11
Cash and Cash Equivalents 2,087 1,610 1,105
Funds deposited by counterparties 271 76 258
Restricted cash           217           237           292
Total Cash and Funds Deposited 2,575 1,923 1,655
Revolver Availability           1,058           1,133           673
Total Liquidity 3,633 3,056 2,328
Less: Funds deposited as collateral by hedge counterparties          

(271)
         

(76)
         

(258)
Total Current Liquidity           3,362           2,980           2,070
Less: Reserve for 2017 bond redemption (1)           -           (270)           -
Total Current Liquidity, adjusted           3,362           2,710           2,070

(1) On October 24 th, NRG redeemed the remaining $270 million outstanding of the 2017 Senior Notes

Total current liquidity, as of December 31, 2012, was $3,362 million, an increase of $1,292 million from December 31, 2011 driven largely by NRG’s free cash flow, the GenOn acquisition and a $385 million increase in Revolver availability primarily due to the sell-down of the Agua Caliente project. The $75 million decrease in restricted cash is primarily due to reduced collateral requirements for the Company’s solar projects as NRG continues to contribute equity. Cash and cash equivalents increased by $982 million due to the following items:
  • $1,127 million of adjusted cash flow from operations;
  • $983 million cash acquired in the GenOn transaction, net of $686 million used to retire the GenOn term loan at closing;
  • $174 million in gross proceeds from the sale of Schkopau, partially offset by $42 million of cash remaining on Schkopau’s balance sheet on date of sale;
  • $122 million in proceeds from the sell down of the Agua Caliente project;
  • Partially offset by $1,382 million of cash outflows consisting of the following items:
    • $733 million for solar and conventional growth investments (net of debt and third party funding of $2,337 million);
    • $220 million of cash paid for maintenance and environmental capital expenditures (net of financing of $47 million);
    • $172 million net paydown of Senior Notes and $79 million of scheduled debt amortization;
    • $50 million in payments of dividends to preferred and common shareholders;
    • $46 million in merger related payments; and
    • $82 million in other investing and financing activities

Growth Initiatives and Developments

NRG continued to advance its leadership position in sustainable energy including:

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