Reaffirms Third Quarter and Full Year Guidance for 2015
PRINCETON, N.J.--(BUSINESS WIRE)--Sep. 18, 2015--
NRG Yield, Inc. (NYSE:NYLD, NYLD.A) announced it has entered into an
agreement with NRG to acquire 75% of the equity interests in a portfolio
of wind projects consisting primarily of assets acquired by NRG from
Edison Mission Energy in April 2014 (EME Wind Portfolio) for $210
million in total cash consideration, subject to working capital
adjustments, plus assumed project debt of approximately $145 million and
tax equity of approximately $97 million (as of August 1, 2015 on a pro
rata basis).
The EME Wind Portfolio includes the following assets, representing
approximately 814 net megawatts (MW) of total operating capacity:
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Elkhorn Ridge – 54 MW wind facility located in Bloomfield, NE
-
San Juan Mesa – 90 MW wind facility located in Elida, NM
-
Wildorado – 161 MW wind facility located in Vega, TX
-
Crosswinds – 21 MW wind facility located in Ayrshire, IA
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Forward – 29 MW wind facility located in Berlin, PA
-
Hardin – 15 MW wind facility located in Jefferson, IA
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Odin – 20 MW wind facility located in Odin, MN
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Sleeping Bear – 95 MW wind facility located in Woodward, OK
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Spanish Fork – 19 MW wind facility located in Spanish Fork, UT
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Lookout – 38 MW wind facility located in Berlin, PA
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Goat Wind – 150 MW wind facility located in Sterling City, TX
-
Elbow Creek – 122 MW wind facility located in Howard County, TX
The Company expects these assets to deliver approximately $41 million of
Adjusted EBITDA and $21 million of cash available for distribution
(CAFD) on a run-rate basis1 and provide incremental
geographical and counterparty diversification. At closing, the portfolio
is expected to have an average contracted life of approximately 11 years2
and an average offtaker credit rating of A33. The transaction
is expected to close in the fourth quarter, subject to receipt of third
party consents and other closing conditions.
The Company is also reaffirming third quarter and full year guidance for
2015 and continues to have the ability to deliver a target 15% dividend
per share growth through 2018, which is not dependent on access to the
equity capital markets.
“NRG Yield continues to remain tactically vital to NRG’s long-term
contracted growth strategy. With this fourth drop-down transaction
from NRG Energy, we continue to deliver on NRG Yield’s growth strategy
and to prove the symbiotic relationship between the two entities,”
said David Crane, NRG Yield's Chairman and Chief Executive Officer.
1 Reflects 75% equity interest acquired by NYLD; based on
average Adjusted EBITDA and CAFD over the remaining expected life of the
portfolio based on P50 production scenario
2 CAFD-weighted per project
3 CAFD-weighted per project
About NRG Yield
NRG Yield owns a diversified portfolio of contracted renewable and
conventional generation and thermal infrastructure assets in the U.S.,
including fossil fuel, solar and wind power generation facilities that
provide the capacity to support more than one 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 ten
locations.
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 NRG
Yield’s expectations regarding the anticipated benefits of the
acquisition 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 have been correct, and actual results may vary materially. Factors
that could cause actual results to differ materially from those
contemplated above 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 regulation of markets,
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 other acquisitions, NRG Yield’s ability to enter
into new contracts as existing contracts expire, NRG Yield’s ability to
acquire assets from NRG Energy, Inc. or third parties, NRG Yield’s
ability to close drop-down transactions, and NRG Yield’s ability to
maintain and grow its quarterly dividends.
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 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.
|
Appendix Table A-1: Adjusted EBITDA and CAFD Reconciliation
|
|
The following table summarizes the calculation of Adjusted EBITDA
and CAFD and
provides a reconciliation to income before taxes:
|
|
|
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($ in millions)
|
75% interest of EME
Wind Drop Down
Run-Rate4
|
|
Income/(Loss) before Tax
|
(1)
|
|
Plus:
|
|
|
Interest Expense, net
|
10
|
|
Depreciation, Amortization, and ARO Expense
|
45
|
|
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA
from
Unconsolidated Affiliates
|
1
|
|
Adjusted EBITDA
|
55
|
|
Pro-rata Adjusted EBITDA from unconsolidated affiliates
|
(10)
|
|
Cash distributions from unconsolidated affiliates
|
10
|
|
Tax Equity Proceeds
|
2
|
|
Distributions to non-controlling interest
|
(7)
|
|
Cash interest paid
|
(11)
|
|
Maintenance Capital expenditures
|
(1)
|
|
Principal amortization of indebtedness
|
(17)
|
|
Cash Available for Distribution
|
21
|
4 75% interest in 814 net MW of wind assets primarily
acquired by NRG in the EME transaction reflecting the useful life of
assets, Adjusted EBITDA will be consolidated on NRG Yield, 75% pro-rata
Adjusted EBITDA is approximately $41MM
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-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.
Cash available for distribution 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 others assets. Management believes cash available for
distribution is a relevant supplemental measure of the Company’s ability
to earn and distribute cash returns to investors.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150918005120/en/
Source: NRG Yield, Inc.
Media:
NRG
Karen Cleeve, 609-524-4608
or
Marijke
Shugrue, 609-524-5262
or
Investors:
NRG
Chad
Plotkin, 609-524-4526
or
Lindsey Puchyr, 609-524-4527
