NRG Yield, Inc. Announces Second Quarter 2013 Financial Results Following Successful Initial Public

NRG Yield, Inc. Announces Second Quarter 2013 Financial Results Following Successful Initial Public Offering

Business and Financial Highlights

  • Closed Initial Public Offering (IPO) of 22,511,250 shares on July 22, 2013 at a price of $22 per share, above the initial pricing range of $19 - $21 per share

  • Second Quarter Results:

    • Adjusted EBITDA of $61 million

    • Cash Available for Distribution of $32 million

  • Pro-rated initial quarterly dividend of $0.23 per share of Class A common stock (based on initial quarterly dividend of $0.30) expected to be declared and paid during the fourth quarter 2013


Providing Full Year 2013 and 2014 Guidance

  • Adjusted EBITDA: $240 million and $285 million for 2013 and 2014, respectively

  • Cash Available for Distribution: $72 million and $103 million for 2013 and 2014, respectively

Reaffirming Twelve Months Ending June 30, 2014 and June 30, 2015 Guidance

  • Adjusted EBITDA: $282 million and $286 million for June 30, 2014 and June 30, 2015, respectively

  • Cash Available for Distribution: $87 million and $105 million for June 30, 2014 and June 30, 2015, respectively

PRINCETON, N.J.--(BUSINESS WIRE)-- NRG Yield, Inc. (NYS: NYLD) today reported second quarter 2013 financial and operating results. NRG Yield, Inc. closed its initial public offering on July 22, 2013 and the financial and operating results for the second quarter 2013 discussed below reflect the results of the predecessor of the Company.

"We are pleased to report strong financial and operating results for the first quarter following our successful initial public offering," said NRG Yield Chairman, Chief Executive Officer and President David Crane. "We believe this marks the beginning of our effort to deliver a consistent, predictable and steadily growing stream of distributable cash flows from our contracted asset portfolio to our shareholders."

Table 1: Selected Financial Results

Three Months Ended

Six Months Ended

(dollars in millions)

6/30/13

6/30/12

6/30/13

6/30/12

Operating Revenue

79

42

132

86

Net Income

33

(1)

40

4

Adjusted EBITDA

61

25

95

50

Cash Available for Distribution

32

13

27

14

Table 2: Selected Operating Results

Three Months Ended

Six Months Ended

(MWh and MWt in thousands)

6/30/13

6/30/12

6/30/13

6/30/12

Equivalent Availability Factor (Conventional)

95.4%

96.4%

92.4%

97.3%

Renewable Generation (MWh)

241

124

423

250

Thermal Generation (MWht)

367

343

871

760

NRG Yield reported net income for the quarter of $33 million. For the quarter, Adjusted EBITDA was $61 million and cash available for distribution was $32 million. Adjusted EBITDA was higher by $36 million, or 144%, when compared to the same quarter of 2012, primarily driven by assets that came online during the fourth quarter of 2012 through the first half of 2013. These assets include within our Renewable segment, all of the MWs associated with Avra Valley, Alpine, Borrego, and 105MWs from our 48.95% interest in CVSR, as well as Marsh Landing, which is within our Conventional segment.

Segment Results

Table 3: Adjusted EBITDA

(dollars in millions)

Three Months Ended

Six Months Ended

Segment

6/30/13

6/30/12

6/30/13

6/30/12

Conventional

26

8

34

16

Renewable

28

10

45

19

Thermal

9

9

20

19

Corporate

(2)

(2)

(4)

(4)

Adjusted EBITDA

61

25

95

50

Table 4: Net Income/(Loss)

(dollars in millions)

Three Months Ended

Six Months Ended

Segment

6/30/13

6/30/12

6/30/13

6/30/12

Conventional

15

4

19

8

Renewable

17

(7)

21

(5)

Thermal

4

3

9

7

Corporate

(3)

(1)

(9)

(6)

Net Income/(Loss)

33

(1)

40

4

Liquidity and Capital Resources

Table 5: Liquidity

(dollars in millions)

6/30/13

12/31/12

Cash and Cash Equivalents

17

22

Restricted Cash

67

20

Total Liquidity

84

42

As of June 30, 2013, NRG Yield had total liquidity of $84 million, an increase of $42 million from December 31, 2012, driven by $21 million in 1603 cash grant proceeds from the Avra Valley solar project net of repayment of the cash grant bridge loan, as well as $23 million of cash held in reserve for remaining construction payments related to the Marsh Landing facility.

On July 22, 2013, the Company raised $468 million in its initial public offering with the sale of 22,511,250 shares of Class A common stock and used $395 million to purchase Class A units in NRG Yield LLC from NRG Energy Inc. representing a 29.1% interest. It also used $73 million to purchase an additional 3.5 million Class A units, or 5.4% interest, in NRG Yield LLC with such funds earmarked for general corporate purposes. Concurrently, NRG Yield LLC, through its ownership of NRG Yield Operating LLC, acquired a portfolio of solar, wind, and natural gas generation and thermal infrastructure assets, primarily located in the Northeast, Southwest and California regions of the United States from NRG Energy Inc. in return for 42,738,750 Class B units in NRG Yield LLC. In connection with the initial public offering NRG Yield LLC and NRG Yield Operating LLC entered into a $60 million senior secured revolving credit facility.

Guidance

NRG Yield is reaffirming the Adjusted EBITDA and Cash Available for Distribution guidance as forecasted in our prospectus of July 16, 2013 of $282 million and $87 million, respectively, for the twelve months ending June 30, 2014 and $286 million and $105 million, respectively, for the twelve months ending June 30, 2015. We are also providing Adjusted EBITDA guidance for the twelve months ending December 31, 2013 and 2014, of $240 million and $285 million respectively, and Cash Available for Distribution guidance for the twelve months ending December 31, 2013 and 2014 of $72 million and $103 million, respectively. Finally, we are also reaffirming our intention to pay a pro-rated initial quarterly dividend of $0.23 per share of Class A common stock (calculated from the closing date of the offering through and including September 30, 2013, and based on our initial quarterly dividend of $0.30) expected to be declared and paid during the fourth quarter 2013.

Table 6: Adjusted EBITDA and Cash Available for Distribution Guidance

For the twelve months ending

(dollars in millions)

12/31/13

06/30/14

12/31/14

06/30/15

Adjusted EBITDA

240

282

285

286

Pro-rata Adjusted EBITDA from unconsolidated affiliates

(60)

(70)

(75)

(74)

Cash distributions from unconsolidated affiliates

20

22

38

44

Cash interest paid

(58)

(72)

(65)

(63)

Maintenance capital expenditures

(16)

(12)

(10)

(12)

Change in other assets

12

1

1

1

Principal amortization of indebtedness

(66)

(64)

(71)

(77)

Estimated Cash Available for Distribution

72

87

103

105

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. NRG Yield is traded on the New York Stock Exchange under the symbol NYLD. Visit 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 Adjusted EBITDA, 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 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 and of environmental emissions, 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 implement acquisitions, our ability to enter into new contracts as existing contracts expire, our ability to obtain anticipated Section 1603 Cash Grants 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 14, 2013, 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.

NRG YIELD

COMBINED STATEMENTS OF OPERATIONS

(Unaudited)

Three months ended
June 30,

Six months ended
June 30,

(In millions, except for per share amounts)

2013

2012

2013

2012

Operating Revenues

Total operating revenues

$

79

$

42

$

132

$

86

Operating Costs and Expenses

Cost of operations

30

26

59

53

Depreciation and amortization

9

6

19

12

General and administrative — affiliate

2

2

4

4

Total operating costs and expenses

41

34

82

69

Operating Income

38

8

50

17

Other Income/(Expense)

Equity in earnings of unconsolidated affiliates

2

6

6

9

Interest expense

(6

)

(16

)

(11

)

(20

)

Total other expense

(4

)

(10

)

(5

)

(11

)

Income/(Loss) Before Income Taxes

34

(2

)

45

6

Income tax expense/(benefit)

1

(1

)

5

2

Net Income/(Loss)

33

(1

)

40

4

See accompanying notes to combined financial statements.

NRG YIELD

COMBINED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)

Three months ended
June 30,

Six months ended
June 30,

2013

2012

2013

2012

Net Income/(Loss)

$

33

$

(1

)

$

40

$

4

Other Comprehensive Income, net of tax

Unrealized gain/(loss) on derivatives, net of income taxes of $13, $3, $15 and $5

18

(5

)

19

(7

)

Other comprehensive income/(loss)

18

(5

)

19

(7

)

Comprehensive Income/(Loss)

51

(6

)

59

(3

)

See accompanying notes to combined financial statements.

NRG YIELD

COMBINED BALANCE SHEETS

June 30, 2013

December 31, 2012

(In millions, except shares)

(unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

17

$

22

Restricted cash

67

20

Accounts receivable, net — trade

37

22

Due from NRG and subsidiaries

8

Inventory

9

5

Notes receivable — external

10

9

Renewable energy grant receivable

101

Deferred income taxes

10

1

Prepayments and other current assets

9

2

Total current assets

268

81

Property, plant and equipment, net of accumulated depreciation of $134 and $115

1,492

1,598

Other Assets

Equity investments in affiliates

243

220

Notes receivable — affiliate

3

6

Notes receivable — external

7

8