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NRG Energy Raises 2014 Guidance On Strength Of Increased Operational And Cost Synergies Arising Out Of The GenOn Acquisition

Stocks in this article: NRG

NRG Energy (NYSE: NRG) is increasing its guidance for both adjusted EBITDA and FCF before growth investments following today’s announcement on improved synergies resulting from the GenOn combination as well as providing an update on current market conditions. Specifically, NRG is reaffirming 2013 adjusted EBITDA guidance, increasing 2014 adjusted EBITDA guidance by $90 million, and increasing FCF before growth guidance in 2013 and 2014 by $50 million and $200 million, respectively. These changes to guidance are relative to the guidance ranges previously provided on NRG’s first quarter earnings presentation on May 7, 2013 and are due to a number of factors, including:

  • Increases in all GenOn combination-related synergies (Cost, Operational, and Balance Sheet)
  • Updated outlook on forward commodity prices, competitive markets, and impact of mild weather experienced year to date
 

2013 and 2014 Guidance

($ in Millions) 2013 2014
Adjusted EBITDA 1 $2,615-$2,815

 

$2,850-$3,050

Wholesale 1,825-1,940 1,915-2,030
Retail 575-650 600-675
Solar 2 215-225 335-345
FCF, before growth investments $1,050-$1,250 $1,100-$1,300

Note: Reconciliation of Adjusted EBITDA are shown in Appendix

1Includes $200 million and $325 million in 2013 and 2014, respectively, of synergies as revised in today’s disclosure

2Solar projects include the adjusted EBITDA contribution from the projects excluding development expenses

 

“As a result of our ongoing continuous improvement and integration program over the past six months following the GenOn combination, we are pleased to announce significantly increased guidance for 2013 and 2014,” said David Crane, NRG’s President and Chief Executive Officer. “Our continued focus on relentless execution in our core businesses, combined with the inherent benefits of our combined energy platform, is putting us in a position to deliver strong financial performance even through the softer portion of the commodity price cycle.”

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