NRG Energy, Inc. Reports First Quarter 2009 Results Financial Highlights
– By Stephen Heiser –
$477 million of adjusted EBITDA, compared to $525 million in first quarter 2008, net of mark-to-market (MtM) impacts;
$139 million of cash flow from operations;
$3.1 billion in liquidity at March 31, 2009;
$205 million of Term Loan B debt repaid; and
NRG affirms 2009 adjusted EBITDA and cash flow from operations guidance.
Portfolio Management and Capital Allocation Highlights
$500 million long-lead time material financing executed by Nuclear Innovation North America LLC (NINA) with Toshiba America Nuclear Energy, Inc. (TANE);
$58.5 million tax-exempt financing closed at Dunkirk;
$534 million financing closed for GenConn peakers projects;
Reliant retail acquisition on track to close May 1, 2009, one month ahead of schedule;
MIBRAG sale transaction on target to close in second quarter of 2009;
Construction begins on the 150 megawatt (MW) Langford Wind Project;
550 MW Cedar Bayou unit 4 combined cycle project on target for June 2009 startup; and
Approximately 500 MW of solar project development rights acquired from eSolar.
NRG Energy, Inc. has reported income from continuing operations for the three months ended March 31, 2009 of $198 million, or $0.70 per diluted common share, compared to $45 million, or $0.12 per diluted common share, for the first quarter last year. Income from continuing operations before taxes was $496 million for the first three months of 2009, a $397 million increase over the $99 million in the first quarter of 2008. The increase in income from continuing operations was driven by $271 million in unrealized mark-to-market (MtM) gains in the current quarter compared with $160 million in unrealized MtM losses in the first quarter of 2008. Operating expenses for the first quarter of 2009 included $5 million in Exelon defense costs and $12 million associated with the Company’s pending acquisition of Reliant Energy’s Texas retail energy business.
Adjusted EBITDA, excluding MtM impacts, was $477 million for the first quarter of 2009 compared to $525 million in the prior year’s first quarter. Increased quarter-over-quarter adjusted EBITDA in our Texas region, from higher hedged prices, was offset by a decline in the Northeast region, which experienced lower generation and lower capacity revenues. South Central’s adjusted EBITDA, down $34 million, was negatively impacted by lower generation and merchant pricing, and the $16 million adjusted EBITDA decline in the West region reflects increased planned maintenance and expiration of a tolling agreement at El Segundo Generating Station in April of 2008.
“NRG’s active portfolio and prudent balance sheet management have enabled the Company once again to deliver strong financial results in the midst of deteriorating economic conditions and falling commodity prices, particularly in our Northeast Region,” commented David Crane, NRG President and Chief Executive Officer. “During this period, the Company continued to advance on all fronts in our efforts to create value for our shareholders via the acquisition of Reliant’s Texas retail business, the acquisition of a portfolio of large-scale solar development projects, the sale of a non-core asset in Europe and the issuance of project financing to further RepoweringNRG efforts.”
Cash flow from operations was $139 million during the first three months of 2009, a $79 million increase compared to the first quarter of 2008. The increase in cash flow from operations in 2009 was driven primarily by the close-out of commercial trade positions and lower commodity prices. Other movements in working capital during the first quarter included increased inventory of $29 million and the balance due to various changes in other assets and liabilities.
Plant reliability continued to improve, achieving an EFOR, or Equivalent Forced Outage Rate, of 2.2% in the first quarter of 2009 versus 2.8% during the same period last year. Total generation however, declined by 12% and 39% in our coal and gas fleets, respectively, as lower demand along with increased wind generation in Texas and a declining commodity price environment led to lower power prices and generation. Planned outages to install environmental back-end controls at the Huntley station and transmission system line outages in western New York also contributed to lower coal generation. Our nuclear generation increased by 1% for the first three months of 2009, as the South Texas Project (STP) extended its streak to 16 consecutive quarters without an unplanned outage. This builds upon STP’s exceptional performance, as it was also announced during the quarter that in 2008, for the fifth consecutive year, STP produced more electricity than any other two-unit nuclear power plant in the nation.