-
Reaffirming 2016 Financial Guidance
-
Increasing quarterly dividend by 4.3% and reaffirming 15% annualized
dividend per share growth through 2018
-
Raised $97.5 million in cash from new non-recourse project financing
-
Executed agreement with NRG to acquire 51.05% interest in the
California Valley Solar Ranch (CVSR) project
-
Investments in distributed solar with NRG nearing $150 million
PRINCETON, N.J.--(BUSINESS WIRE)--Aug. 9, 2016--
NRG Yield, Inc. (NYSE: NYLD, NYLD.A) today reported second quarter 2016
financial results including Net Income of $58 million, Adjusted EBITDA
of $240 million, Cash from Operating Activities of $96 million, and Cash
Available for Distribution (CAFD) of $63 million.
“NRG Yield's platform of renewable, conventional and thermal assets
continues to provide strong, balanced, and predictable financial results
leading to another quarter of dividend growth,” said Chris Sotos, NRG
Yield’s President and Chief Executive Officer. “With the announcement of
the CVSR transaction, NRG Yield has restarted the growth engine, and we
are pleased to do so in a capital efficient and accretive manner.”
Overview of Financial and Operating Results
Segment Results
Table 1: Net Income1
|
($ millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Segment
|
|
6/30/16
|
|
6/30/15
|
|
6/30/16
|
|
6/30/15
|
|
Conventional
|
|
41
|
|
|
33
|
|
|
69
|
|
|
59
|
|
|
Renewable
|
|
45
|
|
|
21
|
|
|
33
|
|
|
(19
|
)
|
|
Thermal
|
|
6
|
|
|
5
|
|
|
14
|
|
|
11
|
|
|
Corporate
|
|
(34
|
)
|
|
(21
|
)
|
|
(56
|
)
|
|
(33
|
)
|
|
Net Income
|
|
58
|
|
|
38
|
|
|
60
|
|
|
18
|
|
1 In accordance with GAAP, 2015 results have been recast
to include the Drop Down Assets acquired by NRG Yield from NRG on
November 3, 2015, as if the combination had been in effect since the
inception of common control.
Table 2: Adjusted EBITDA1
|
($ millions)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Segment
|
|
6/30/16
|
|
6/30/15
|
|
6/30/16
|
|
6/30/15
|
|
Conventional
|
|
78
|
|
|
79
|
|
|
148
|
|
|
143
|
|
|
Renewable
|
|
153
|
|
|
112
|
|
|
258
|
|
|
169
|
|
|
Thermal
|
|
12
|
|
|
11
|
|
|
28
|
|
|
25
|
|
|
Corporate
|
|
(3
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
Adjusted EBITDA
|
|
240
|
|
|
199
|
|
|
428
|
|
|
331
|
|
1 In accordance with GAAP, 2015 results have been recast
to include the Drop Down Assets acquired by NRG Yield from NRG on
November 3, 2015, as if the combination had been in effect since the
inception of common control.
Table 3: Cash from Operating Activities and Cash Available for
Distribution (CAFD)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
($ millions)
|
|
6/30/16
|
|
6/30/15
|
|
6/30/16
|
|
6/30/15
|
|
Cash from Operating Activities
|
|
96
|
|
|
18
|
|
|
198
|
|
|
93
|
|
Cash Available for Distribution (CAFD)
|
|
63
|
|
|
26
|
|
|
106
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the second quarter of 2016, NRG Yield reported Net Income of $58
million, Adjusted EBITDA of $240 million, Cash from Operating Activities
of $96 million, and CAFD of $63 million. Second quarter results were
higher than 2015 primarily due to increased wind production in the
Renewable segment and the acquisitions of Desert Sunlight and Spring
Canyon.
For the six months ending June 30, 2016, NRG Yield reported Net Income
of $60 million, Adjusted EBITDA of $428 million, Cash from Operating
Activities of $198 million, and CAFD of $106 million. Year to date
results were higher than 2015 primarily due to the increased wind
production in the Renewable segment and the acquisitions of Desert
Sunlight and Spring Canyon.
Operational Performance
Table 4: Selected Operating Results
|
(MWh and MWht in thousands)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
6/30/16
|
|
6/30/15
|
|
6/30/16
|
|
6/30/15
|
|
Equivalent Availability Factor (Conventional)
|
|
98.3
|
%
|
|
96.5
|
%
|
|
92.5
|
%
|
|
89.4
|
%
|
|
Renewable Generation Sold (MWh)
|
|
1,820
|
|
1,699
|
|
3,470
|
|
2,873
|
|
Thermal Generation Sold (MWht) 1 |
|
457
|
|
517
|
|
1,050
|
|
1,178
|
1 Also includes Thermal MWh sold
For the second quarter of 2016, NRG Yield experienced improved
availability at the Conventional segment versus the second quarter of
2015 following the January 2015 forced outage at the El Segundo Energy
Center, which returned to service in mid-April 2015. In the second
quarter of 2016, generation in the Renewable segment was below
expectations but 7% higher than the second quarter of 2015 primarily due
to stronger wind resources at the Alta wind portfolio in California.
Liquidity and Capital Resources
Table 5: Liquidity
|
($ millions)
|
|
6/30/16
|
|
03/31/16
|
|
12/31/15
|
|
Cash and Cash Equivalents
|
|
89
|
|
|
76
|
|
|
111
|
|
Restricted Cash
|
|
55
|
|
|
60
|
|
|
48
|
|
Total Cash
|
|
144
|
|
|
136
|
|
|
159
|
|
Revolver Availability
|
|
110
|
|
|
119
|
|
|
133
|
|
Total Liquidity
|
|
254
|
|
|
255
|
|
|
292
|
|
|
|
|
|
|
|
|
|
|
Total liquidity as of June 30, 2016, was $254 million, a decrease of $38
million from December 31, 2015. This reflects a decrease in revolver
availability of $23 million and a decrease in cash of $15 million1
used to fund capital commitments to NRG Yield’s distributed solar
partnerships with NRG Energy. As of July 31, 2016, NRG Yield's revolver
availability was $238 million reflecting repayment of $125 million
during the month of July.
Financing Updates
California Valley Solar Ranch Holdco (CVSR Financing)
On July 15, 2016, in anticipation of acquiring NRG Energy's 51.05%
interest in the CVSR project, CVSR Holdco LLC, the indirect owner of the
project, which is 48.95% owned by the Company, issued $200 million of
senior secured notes that bear interest at a rate of 4.68%2
and are fully amortizing over 21 years. The Company's net pro-rata share
of the borrowings was $97.5 million. In advance of the closing of the
CVSR acquisition, the proceeds of the CVSR Financing were used to repay
outstanding borrowings under the revolver.
Growth Investments
California Valley Solar Ranch Project
On August 8, 2016, NRG Yield entered into a definitive agreement with
NRG to acquire the remaining 51.05% interest in the CVSR project for
$78.5 million in cash consideration3, plus assumed
non-recourse project level debt of $496 million4, which
includes NRG's portion of the newly issued CVSR Financing of $101.5
million. NRG Yield intends to fund the purchase through the proceeds
raised in the CVSR Financing by redrawing on the revolver. When
factoring in the impact of NRG Yield's 48.95% share of the CVSR
Financing, the acquisition will increase Adjusted EBITDA and CAFD on an
annual basis by $40 million and $5 million, respectively5.
The sale is subject to customary closing conditions and is expected to
close in the third quarter of 2016.
Investment Partnerships with NRG Energy
During the second quarter of 2016, NRG Yield invested $5 million and $3
million respectively in the distributed solar investment partnerships
(business and residential) with NRG. With these investments, NRG Yield
now co-owns approximately 117 MW6 of distributed solar
(business and residential) capacity with a weighted average contract
life of approximately 19 years.
On August 5, 2016, in connection with NRG's change in business model
approach in the residential solar business, NRG Yield and NRG amended
the residential solar partnership to reduce NRG Yield's total capital
commitment to this partnership from $100 million to $60 million. This
change does not impact NRG Yield's 2016 financial guidance or ability to
pay the dividend.
Quarterly Dividend Updates
On July 26, 2016, NRG Yield’s Board of Directors declared a quarterly
dividend on Class A and Class C common stock of $0.24 per share ($0.96
per share annualized) payable on September 15, 2016, to stockholders of
record as of September 1st, 2016. This equates to a 4.3%
increase over the prior quarter and an increase of 14% over the previous
year after taking into account the May 14, 2015, recapitalization of the
Company.
Seasonality
NRG Yield’s quarterly operating results are impacted by seasonal
factors. The majority of NRG Yield’s revenues are generated from the
months of May through September, as contracted pricing and renewable
resources are at their highest levels in the Company’s core markets. The
factors driving the fluctuation in Net Income, Adjusted EBITDA, Cash
from Operating Activities, and CAFD include the following:
-
Higher summer capacity prices from conventional assets;
-
Higher solar insolation during the summer months;
-
Higher wind resources during the spring months;
-
Debt service payments which are made either quarterly or
semi-annually; and
-
Timing of maintenance capital expenditures
The Company takes into consideration the timing of these factors to
ensure sufficient funds are available for distribution on a quarterly
basis.
Financial Guidance
NRG Yield is reaffirming full year guidance7 of $805 million
Adjusted EBITDA and $265 million of CAFD, although actual results may
vary depending on the operating performance of the assets.
NRG Yield intends to update full year guidance upon the closing of the
CVSR acquisition which will reflect results on a fully consolidated
basis.
NRG Yield is targeting a quarterly dividend of $0.25 per share ($1.00
per share annualized) on each of its Class A and Class C common stock by
the fourth quarter of 2016. This would represent a 16% year over year
increase since the fourth quarter of 2015.
Earnings Conference Call
On August 9, 2016, NRG Yield will host a conference call at 11:00 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 Yield’s website at http://www.nrgyield.com
and clicking on “Presentations & Webcasts.”
About NRG Yield
NRG Yield owns a diversified portfolio of contracted renewable and
conventional generation and thermal infrastructure assets in the United
States, including fossil fuel, solar and wind power generation
facilities that provide the capacity to support more than two million
American homes and businesses. Our thermal infrastructure assets provide
steam, hot water and/or chilled water, and in some instances
electricity, to commercial businesses, universities, hospitals and
governmental units in multiple locations. NRG Yield’s Class C and Class
A common stock are traded on the New York Stock Exchange under the
symbols NYLD and NYLD.A, respectively. Visit www.nrgyield.com
for more information.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions and include our
Net Income, Adjusted EBITDA, Cash from Operating Activities, cash
available for distribution, expected earnings, future growth and
financial performance, and typically can be identified by the use of
words such as “expect,” “estimate,” “anticipate,” “forecast,” “plan,”
“believe” and similar terms. Although NRG Yield believes that its
expectations are reasonable, it can give no assurance that these
expectations will prove to be correct, and actual results may vary
materially. Factors that could cause actual results to differ materially
from those contemplated herein include, among others, general economic
conditions, hazards customary in the power industry, weather conditions,
including wind and solar performance, competition in wholesale power
markets, the volatility of energy and fuel prices, failure of customers
to perform under contracts, changes in the wholesale power markets,
changes in government regulation, the condition of capital markets
generally, our ability to access capital markets, unanticipated outages
at our generation facilities, adverse results in current and future
litigation, failure to identify or successfully execute acquisitions,
our ability to enter into new contracts as existing contracts expire,
our ability to acquire assets from NRG Energy, Inc. or third parties,
our ability to maintain or create successful partnering relationships
with NRG Energy and other third parties, our ability to close Drop Down
transactions, and our ability to maintain and grow our quarterly
dividends. Furthermore, any dividends are subject to available capital,
market conditions, and compliance with associated laws and regulations.
NRG Yield undertakes no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The Adjusted EBITDA and Cash Available for
Distribution are estimates as of today’s date, August 9, 2016, and are
based on assumptions believed to be reasonable as of this date. NRG
Yield expressly disclaims any current intention to update such guidance.
The foregoing review of factors that could cause NRG Yield’s actual
results to differ materially from those contemplated in the
forward-looking statements included in this news release should be
considered in connection with information regarding risks and
uncertainties that may affect NRG Yield’s future results included in NRG
Yield’s filings with the Securities and Exchange Commission at www.sec.gov.
In addition, NRG Yield makes available free of charge at www.nrgyield.com,
copies of materials it files with, or furnish to, the SEC.
1 See Appendix A-6 for Six Months Ended June 30, 2016 Sources
and Uses of Cash and Cash Equivalents detail
2 All-in interest rate including fees is 5.13%, 4.68% rate
represents coupon payments only
3 Subject to customary working capital adjustments
4 Represents the 51.05% interest of the expected non-recourse
debt balance at the closing date
5 See Appendix A-8 and A-9 for detail on the financial impact
of the transaction
6 Includes 17 MW of residential solar leases acquired outside
of partnership
7 Guidance excludes the impact of interest on cash drawn on
NRG Yield's revolving credit facility, see appendix A-7
|
|
|
NRG YIELD, INC.
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
(In millions, except per share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
$
|
258
|
|
|
$
|
235
|
|
|
$
|
478
|
|
|
$
|
435
|
|
|
Operating Costs and Expenses
|
|
|
|
|
|
|
|
|
|
Cost of operations
|
|
75
|
|
|
75
|
|
|
158
|
|
|
159
|
|
|
Depreciation and amortization
|
|
67
|
|
|
70
|
|
|
133
|
|
|
137
|
|
|
General and administrative
|
|
3
|
|
|
3
|
|
|
6
|
|
|
6
|
|
|
Acquisition-related transaction and integration costs
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
Total operating costs and expenses
|
|
145
|
|
|
149
|
|
|
297
|
|
|
303
|
|
|
Operating Income
|
|
113
|
|
|
86
|
|
|
181
|
|
|
132
|
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated affiliates
|
|
18
|
|
|
8
|
|
|
20
|
|
|
10
|
|
|
Other income, net
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
Loss on debt extinguishment
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
Interest expense
|
|
(62
|
)
|
|
(45
|
)
|
|
(130
|
)
|
|
(118
|
)
|
|
Total other expense, net
|
|
(43
|
)
|
|
(44
|
)
|
|
(109
|
)
|
|
(114
|
)
|
|
Income Before Income Taxes
|
|
70
|
|
|
42
|
|
|
72
|
|
|
18
|
|
|
Income tax expense
|
|
12
|
|
|
4
|
|
|
12
|
|
|
—
|
|
|
Net Income
|
|
58
|
|
|
38
|
|
|
60
|
|
|
18
|
|
|
Less: Pre-acquisition net loss of Drop Down Assets
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|
Net Income Excluding Pre-acquisition Net Loss of Drop Down Assets
|
|
58
|
|
|
41
|
|
|
60
|
|
|
25
|
|
|
Less: Net income attributable to noncontrolling interests
|
|
26
|
|
|
31
|
|
|
23
|
|
|
20
|
|
|
Net Income Attributable to NRG Yield, Inc.
|
|
$
|
32
|
|
|
$
|
10
|
|
|
$
|
37
|
|
|
$
|
5
|
|
|
Earnings Per Share Attributable to NRG Yield, Inc. Class A and
Class C Common Stockholders
|
|
|
|
|
|
|
|
|
|
Weighted average number of Class A common shares outstanding - basic
|
|
35
|
|
|
35
|
|
|
35
|
|
|
35
|
|
|
Weighted average number of Class A common shares outstanding -
diluted
|
|
49
|
|
|
35
|
|
|
35
|
|
|
35
|
|
|
Weighted average number of Class C common shares outstanding - basic
|
|
63
|
|
|
35
|
|
|
63
|
|
|
35
|
|
|
Weighted average number of Class C common shares outstanding -
diluted
|
|
73
|
|
|
35
|
|
|
63
|
|
|
35
|
|
|
Earnings per Weighted Average Class A and Class C Common Share -
Basic
|
|
$
|
0.33
|
|
|
$
|
0.15
|
|
|
$
|
0.38
|
|
|
$
|
0.07
|
|
|
Earnings per Weighted Average Class A Common Share - Diluted
|
|
0.29
|
|
|
0.15
|
|
|
0.38
|
|
|
0.07
|
|
|
Earnings per Weighted Average Class C Common Share - Diluted
|
|
0.31
|
|
|
0.15
|
|
|
0.38
|
|
|
0.07
|
|
|
Dividends Per Class A Common Share
|
|
0.23
|
|
|
0.20
|
|
|
0.455
|
|
|
0.59
|
|
|
Dividends Per Class C Common Share
|
|
$
|
0.23
|
|
|
$
|
0.20
|
|
|
$
|
0.455
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NRG YIELD, INC.
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|
|
(Unaudited)
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
(In millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net Income
|
|
$
|
58
|
|
|
$
|
38
|
|
|
$
|
60
|
|
|
$
|
18
|
|
|
Other Comprehensive Income, net of tax
|
|
|
|
|
|
|
|
|
|
Unrealized (loss) gain on derivatives, net of income tax benefit
(expense) of $3, ($4), $12 and $4
|
|
(16
|
)
|
|
23
|
|
|
(57
|
)
|
|
3
|
|
|
Other comprehensive (loss) income
|
|
(16
|
)
|
|
23
|
|
|
(57
|
)
|
|
3
|
|
|
Comprehensive Income
|
|
42
|
|
|
61
|
|
|
3
|
|
|
21
|
|
|
Less: Pre-acquisition net loss of Drop Down Assets
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(7
|
)
|
|
Less: Comprehensive income (loss) attributable to noncontrolling
interests
|
|
13
|
|
|
48
|
|
|
(14
|
)
|
|
30
|
|
|
Comprehensive Income (Loss) Attributable to NRG Yield, Inc.
|
|
$
|
29
|
|
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NRG YIELD, INC.
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(In millions, except shares)
|
|
June 30, 2016
|
|
December 31, 2015
|
|
ASSETS
|
|
(unaudited)
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
89
|
|
|
$
|
111
|
|
|
Restricted cash
|
|
55
|
|
|
48
|
|
|
Accounts receivable — trade
|
|
109
|
|
|
95
|
|
|
Accounts receivable — affiliate
|
|
1
|
|
|
—
|
|
|
Inventory
|
|
35
|
|
|
35
|
|
|
Derivative instruments
|
|
1
|
|
|
—
|
|
|
Notes receivable
|
|
7
|
|
|
7
|
|
|
Prepayments and other current assets
|
|
22
|
|
|
22
|
|
|
Total current assets
|
|
319
|
|
|
318
|
|
|
Property, plant and equipment, net of accumulated depreciation of
$832 and $701
|
|
4,947
|
|
|
5,056
|
|
|
Other Assets
|
|
|
|
|
|
Equity investments in affiliates
|
|
778
|
|
|
798
|
|
|
Notes receivable
|
|
6
|
|
|
10
|
|
|
Intangible assets, net of accumulated amortization of $132 and $93
|
|
1,321
|
|
|
1,362
|
|
|
Deferred income taxes
|
|
170
|
|
|
170
|
|
|
Other non-current assets
|
|
66
|
|
|
61
|
|
|
Total other assets
|
|
2,341
|
|
|
2,401
|
|
|
Total Assets
|
|
$
|
7,607
|
|
|
$
|
7,775
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
251
|
|
|
$
|
241
|
|
|
Accounts payable — trade
|
|
21
|
|
|
23
|
|
|
Accounts payable — affiliate
|
|
32
|
|
|
85
|
|
|
Derivative instruments
|
|
37
|
|
|
39
|
|
|
Accrued expenses and other current liabilities
|
|
39
|
|
|
68
|
|
|
Total current liabilities
|
|
380
|
|
|
456
|
|
|
Other Liabilities
|
|
|
|
|
|
Long-term debt
|
|
4,465
|
|
|
4,562
|
|
|
Accounts payable — affiliate
|
|
20
|
|
|
—
|
|
|
Derivative instruments
|
|
122
|
|
|
61
|
|
|
Other non-current liabilities
|
|
63
|
|
|
64
|
|
|
Total non-current liabilities
|
|
4,670
|
|
|
4,687
|
|
|
Total Liabilities
|
|
5,050
|
|
|
5,143
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none
issued
|
|
—
|
|
|
—
|
|
|
Class A, Class B, Class C and Class D common stock, $0.01 par value;
3,000,000,000 shares authorized (Class A 500,000,000, Class B
500,000,000, Class C 1,000,000,000, Class D 1,000,000,000);
182,848,000 shares issued and outstanding (Class A 34,586,250, Class
B 42,738,750, Class C 62,784,250, Class D 42,738,750) at June 30,
2016, and December 31, 2015
|
|
1
|
|
|
1
|
|
|
Additional paid-in capital
|
|
1,835
|
|
|
1,855
|
|
|
Retained earnings
|
|
26
|
|
|
12
|
|
|
Accumulated other comprehensive loss
|
|
(47
|
)
|
|
(27
|
)
|
|
Noncontrolling interest
|
|
742
|
|
|
791
|
|
|
Total Stockholders' Equity
|
|
2,557
|
|
|
2,632
|
|
|
Total Liabilities and Stockholders' Equity
|
|
$
|
7,607
|
|
|
$
|
7,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NRG YIELD, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
|
|
Six months ended June 30,
|
|
|
|
2016
|
|
2015
|
|
|
|
(In millions)
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
Net income
|
|
$
|
60
|
|
|
$
|
18
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
Equity in earnings of unconsolidated affiliates
|
|
(20
|
)
|
|
(10
|
)
|
|
Distributions from unconsolidated affiliates
|
|
22
|
|
|
32
|
|
|
Depreciation and amortization
|
|
133
|
|
|
137
|
|
|
Amortization of financing costs and debt discounts
|
|
10
|
|
|
6
|
|
|
Amortization of intangibles and out-of-market contracts
|
|
40
|
|
|
26
|
|
|
Adjustment for debt extinguishment
|
|
—
|
|
|
7
|
|
|
Changes in deferred income taxes
|
|
12
|
|
|
—
|
|
|
Changes in derivative instruments
|
|
(2
|
)
|
|
(37
|
)
|
|
Disposal of asset components and ARO accretion
|
|
4
|
|
|
2
|
|
|
Changes in prepaid and accrued capacity payments
|
|
(65
|
)
|
|
(66
|
)
|
|
Changes in other working capital
|
|
4
|
|
|
(22
|
)
|
|
Net Cash Provided by Operating Activities
|
|
198
|
|
|
93
|
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired
|
|
—
|
|
|
(37
|
)
|
|
Acquisition of Drop Down Assets, net of cash acquired
|
|
—
|
|
|
(489
|
)
|
|
Capital expenditures
|
|
(11
|
)
|
|
(8
|
)
|
|
(Increase) decrease in restricted cash
|
|
(7
|
)
|
|
5
|
|
|
Decrease in notes receivable
|
|
4
|
|
|
3
|
|
|
Return of investment from unconsolidated affiliates
|
|
29
|
|
|
15
|
|
|
Investments in unconsolidated affiliates
|
|
(59
|
)
|
|
(328
|
)
|
|
Other
|
|
2
|
|
|
—
|
|
|
Net Cash Used in Investing Activities
|
|
(42
|
)
|
|
(839
|
)
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
Net contributions from noncontrolling interests
|
|
8
|
|
|
123
|
|
|
Distributions to NRG for NRG Wind TE Holdco
|
|
(6
|
)
|
|
—
|
|
|
Proceeds from the issuance of common stock
|
|
—
|
|
|
600
|
|
|
Payment of dividends and distributions to shareholders
|
|
(83
|
)
|
|
(61
|
)
|
|
Payment of debt issuance costs
|
|
—
|
|
|
(11
|
)
|
|
Net borrowings from the revolving credit facility
|
|
12
|
|
|
267
|
|
|
Net payments of long-term debt
|
|
(109
|
)
|
|
(294
|
)
|
|
Net Cash (Used in) Provided by Financing Activities
|
|
(178
|
)
|
|
624
|
|
|
Net Decrease in Cash and Cash Equivalents
|
|
(22
|
)
|
|
(122
|
)
|
|
Cash and Cash Equivalents at Beginning of Period
|
|
111
|
|
|
429
|
|
|
Cash and Cash Equivalents at End of Period
|
|
$
|
89
|
|
|
$
|
307
|
|
|
|
|
|
|
|
|
|
|
|
Appendix Table A-1: Three Months Ended June 30, 2016, Segment
Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and
provides a reconciliation to Net Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
Conventional
|
|
Renewable
|
|
Thermal
|
|
Corporate
|
|
Total
|
|
Net Income/(Loss)
|
|
41
|
|
|
45
|
|
|
6
|
|
|
(34
|
)
|
|
58
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
Interest Expense, net
|
|
12
|
|
|
30
|
|
|
1
|
|
|
19
|
|
|
62
|
|
Depreciation, Amortization, and ARO Expense
|
|
20
|
|
|
42
|
|
|
5
|
|
|
—
|
|
|
67
|
|
Contract Amortization
|
|
2
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
17
|
|
Asset Write Offs
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA
from Unconsolidated Affiliates
|
|
3
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
21
|
|
Adjusted EBITDA
|
|
78
|
|
|
153
|
|
|
12
|
|
|
(3
|
)
|
|
240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix Table A-2: Three Months Ended June 30, 2015, Segment
Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and
provides a reconciliation to Net Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
Conventional
|
|
Renewable
|
|
Thermal
|
|
Corporate
|
|
Total
|
|
Net Income/(Loss)
|
|
33
|
|
|
21
|
|
|
5
|
|
|
(21
|
)
|
|
38
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
Interest Expense, net
|
|
13
|
|
|
17
|
|
|
2
|
|
|
13
|
|
|
45
|
|
Depreciation, Amortization, and ARO Expense
|
|
21
|
|
|
45
|
|
|
4
|
|
|
—
|
|
|
70
|
|
Contract Amortization
|
|
1
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
15
|
|
Merger and Transaction Costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Loss on Debt Extinguishment
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Mark to Market (MtM) Losses
on economic hedges
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA
from Unconsolidated Affiliates
|
|
4
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
15
|
|
Adjusted EBITDA
|
|
79
|
|
|
112
|
|
|
11
|
|
|
(3
|
)
|
|
199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix Table A-3: Six Months Ended June 30, 2016, Segment Adjusted
EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and
provides a reconciliation to Net Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
Conventional
|
|
Renewable
|
|
Thermal
|
|
Corporate
|
|
Total
|
|
Net Income/(Loss)
|
|
69
|
|
|
33
|
|
|
14
|
|
|
(56
|
)
|
|
60
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
Interest Expense, net
|
|
23
|
|
|
66
|
|
|
3
|
|
|
38
|
|
|
130
|
|
Depreciation, Amortization, and ARO Expense
|
|
40
|
|
|
84
|
|
|
10
|
|
|
—
|
|
|
134
|
|
Contract Amortization
|
|
9
|
|
|
30
|
|
|
1
|
|
|
—
|
|
|
40
|
|
Asset Write Offs
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA
from Unconsolidated Affiliates
|
|
7
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
49
|
|
Adjusted EBITDA
|
|
148
|
|
|
258
|
|
|
28
|
|
|
(6
|
)
|
|
428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix Table A-4: Six Months Ended June 30, 2015, Segment Adjusted
EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and
provides a reconciliation to Net Income/(Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
Conventional
|
|
Renewable
|
|
Thermal
|
|
Corporate
|
|
Total
|
|
Net Income/(Loss)
|
|
59
|
|
|
(19
|
)
|
|
11
|
|
|
(33
|
)
|
|
18
|
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Interest Expense, net
|
|
25
|
|
|
63
|
|
|
4
|
|
|
26
|
|
|
118
|
|
|
Depreciation, Amortization, and ARO Expense
|
|
42
|
|
|
86
|
|
|
9
|
|
|
—
|
|
|
137
|
|
|
Contract Amortization
|
|
2
|
|
|
23
|
|
|
1
|
|
|
—
|
|
|
26
|
|
|
Merger and Transaction Costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
Loss on Debt Extinguishment
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
Mark to Market (MtM) (Gains)
on economic hedges
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA
from Unconsolidated Affiliates
|
|
8
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
Adjusted EBITDA
|
|
143
|
|
169
|
|
25
|
|
(6
|
)
|
|
331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix Table A-5: Cash Available for Distribution Reconciliation
The following table summarizes the calculation of Cash Available for
Distribution and provides a reconciliation to Cash from Operating
Activities:
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
($ in millions)
|
|
6/30/16
|
|
6/30/15
|
|
6/30/16
|
|
6/30/15
|
|
Adjusted EBITDA
|
|
240
|
|
|
199
|
|
|
428
|
|
|
331
|
|
|
Cash interest paid
|
|
(72
|
)
|
|
(71
|
)
|
|
(124
|
)
|
|
(128
|
)
|
|
Changes in prepaid and accrued capacity payments
|
|
(28
|
)
|
|
(29
|
)
|
|
(65
|
)
|
|
(66
|
)
|
|
Pro-rata Adjusted EBITDA from unconsolidated affiliates
|
|
(39
|
)
|
|
(23
|
)
|
|
(68
|
)
|
|
(37
|
)
|
|
Distributions from unconsolidated affiliates
|
|
3
|
|
|
(5
|
)
|
|
22
|
|
|
32
|
|
|
All other changes in working capital
|
|
(8
|
)
|
|
(53
|
)
|
|
5
|
|
|
(39
|
)
|
|
Cash from Operating Activities
|
|
96
|
|
|
18
|
|
|
198
|
|
|
93
|
|
|
All other changes in working capital
|
|
8
|
|
|
53
|
|
|
(5
|
)
|
|
39
|
|
|
Return of investment from unconsolidated affiliates
|
|
20
|
|
|
12
|
|
|
29
|
|
|
15
|
|
|
Net contributions (to)/from noncontrolling interest
|
|
(3
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
Cash distributions to non-controlling interest prior to Drop Down
(NRG)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(14
|
)
|
|
Maintenance Capital expenditures
|
|
(3
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(6
|
)
|
|
Principal amortization of indebtedness
|
|
(55
|
)
|
|
(49
|
)
|
|
(109
|
)
|
|
(95
|
)
|
|
Cash Available for Distribution
|
|
63
|
|
|
26
|
|
|
106
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix Table A-6: Six Months Ended June 30, 2016, Sources and Uses
of Liquidity
The following table summarizes the sources and uses of liquidity in the
first six months of 2016.
|
|
|
Six Months Ended
|
|
($ in millions)
|
|
6/30/16
|
|
Sources:
|
|
|
|
Net cash provided by operating activities
|
|
198
|
|
|
Return of investment from unconsolidated affiliates
|
|
29
|
|
|
Net borrowings from the revolving credit facility
|
|
12
|
|
|
Other net cash inflows
|
|
1
|
|
|
Uses:
|
|
|
|
Net payments of long-term debt
|
|
(109
|
)
|
|
Payment of dividends and distributions to shareholders
|
|
(83
|
)
|
|
Investments in unconsolidated affiliates
|
|
(59
|
)
|
|
Capital expenditures
|
|
(11
|
)
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
( 22
|
)
|
|
Change in restricted cash
|
|
7
|
|
|
Change in total cash
|
|
( 15
|
)
|
|
|
|
|
|
Appendix Table A-7: Adjusted EBITDA and Cash Available for
Distribution Guidance8
|
($ in millions)
|
|
2016 Full Year
|
|
Net Income
|
|
230
|
|
|
Income Tax Expense
|
|
45
|
|
|
Interest Expense, net
|
|
270
|
|
|
Depreciation, Amortization, and Accretion Expense
|
|
260
|
|
|
Adjusted EBITDA
|
|
805
|
|
|
Cash interest paid
|
|
(235
|
)
|
|
Changes in prepaid and accrued capacity payments
|
|
(8
|
)
|
|
Pro-rata Adjusted EBITDA from unconsolidated affiliates
|
|
(122
|
)
|
|
Cash distributions from unconsolidated affiliates
|
|
87
|
|
|
Cash from Operating Activities
|
|
527
|
|
|
Net contributions from noncontrolling interest
|
|
1
|
|
|
Maintenance capital expenditures
|
|
(25
|
)
|
|
Principal amortization of indebtedness
|
|
(238
|
)
|
|
Estimated Cash Available for Distribution
|
|
265
|
|
|
|
|
|
|
Appendix Table A-8: Acquisition of CVSR 51.05% Adjusted EBITDA and
Cash Available for Distribution
|
($ in millions)
|
|
CVSR 100% (average 2017 - 2021)
|
|
CVSR 51.05% Pro-Rata Share (average 2017 - 2021)
|
|
Net Income
|
|
25
|
|
|
13
|
|
|
Interest Expense, net
|
|
21
|
|
|
11
|
|
|
Depreciation, Amortization, and Accretion Expense
|
|
32
|
|
|
16
|
|
|
Adjusted EBITDA
|
|
78
|
|
|
40
|
|
|
Cash interest paid
|
|
(27
|
)
|
|
(14
|
)
|
|
Estimated Cash from Operating Activities
|
|
51
|
|
|
26
|
|
|
Principal amortization of indebtedness
|
|
(28
|
)
|
|
(14
|
)
|
|
Estimated Cash Available for Distribution
|
|
23
|
|
|
12
|
|
|
|
|
|
|
|
|
|
Appendix Table A-9: Impact of NRG Yield's 48.95% share of CVSR New
Debt Service
|
($ in millions)
|
|
CVSR 51.05% Net Impact (average 2017 - 2021)
|
|
Annual CAFD Acquired: NRG's 51.05% Interest
|
|
12
|
|
|
Annual Impact of New Debt Service: NYLD's 48.95% Interest
|
|
(7
|
)
|
|
Net Estimated Cash Available for Distribution
|
|
5
|
|
|
|
|
|
|
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 Yield’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 Yield considers it an important supplemental
measure of its performance and believes debt and equity 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 Yield 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 Yield’s business. NRG Yield 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. Adjusted EBITDA represents EBITDA adjusted for
mark-to-market gains or losses, asset write offs and impairments; and
factors which we do not consider indicative of future operating
performance. The reader is encouraged to evaluate each adjustment and
the reasons NRG Yield 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 Yield
may incur expenses similar to the adjustments in this news release.
Management believes Adjusted EBITDA is useful to investors and other
users of our financial statements in evaluating our operating
performance because it provides them with an additional tool to compare
business performance across companies and across periods. This measure
is widely used by investors to measure a company’s 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.
Additionally, Management believes that investors commonly adjust EBITDA
information to eliminate the effect of restructuring and other expenses,
which vary widely from company to company and impair comparability. As
we define it, Adjusted EBITDA represents EBITDA adjusted for the effects
of 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, and any
extraordinary, unusual or non-recurring items plus adjustments to
reflect the Adjusted EBITDA from our unconsolidated investments. We
adjust for these items in our Adjusted EBITDA as our management believes
that these items would distort their ability to efficiently view and
assess our core operating trends.
In summary, our 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 our Board of Directors, shareholders, creditors,
analysts and investors concerning our financial performance.
Cash Available for Distribution (CAFD) is adjusted EBITDA plus cash
dividends from unconsolidated affiliates, less maintenance capital
expenditures, pro-rata adjusted EBITDA from unconsolidated affiliates,
cash interest paid, income taxes paid, principal amortization of
indebtedness and changes in prepaid and accrued capacity payments.
Management believes cash available for distribution is a relevant
supplemental measure of the Company’s ability to earn and distribute
cash returns to investors.
We believe cash available for distribution is useful to investors in
evaluating our operating performance because securities analysts and
other interested parties use such calculations as a measure of our
ability to make quarterly distributions. In addition, cash available for
distribution is used by our management team for determining future
acquisitions and managing our growth. The GAAP measure most directly
comparable to cash available for distribution is cash from operating
activities.
However, cash available for distribution has limitations as an
analytical tool because it does not include changes in operating assets
and liabilities and excludes the effect of certain other cash flow
items, all of which could have a material effect on our financial
condition and results from operations. Cash available for distribution
is a non GAAP measure and should not be considered an alternative to
cash from operating activities or any other performance or liquidity
measure determined in accordance with GAAP, nor is it indicative of
funds available to fund our cash needs. In addition, our calculations of
cash available for distribution are not necessarily comparable to cash
available for distribution as calculated by other companies. Investors
should not rely on these measures as a substitute for any GAAP measure,
including cash from operating activities.
8 Guidance excludes the impact of interest on cash drawn on
NRG Yield's revolving credit facility as of August 9, 2016, which
equates to $5 million on an annualized basis, subject to change
View source version on businesswire.com: http://www.businesswire.com/news/home/20160809005681/en/
Source: NRG Yield, Inc.
Media:
Karen Cleeve, 609-524-4608
or
Candice
Adams, 609-524-5428
or
Investors:
Kevin L. Cole,
CFA, 609-524-4526
or
Lindsey Puchyr, 609-524-4527
