(Source: Business Wire)
NRG Energy, Inc. (NYSE: NRG) today reported net income for the three
months ended September 30, 2009, of $278 million, or $1.02 per diluted
common share, compared to $778 million, or $2.81 per diluted common
share, for the third quarter last year. The current quarter benefited
from Reliant Energy's results which contributed $393 million in pre-tax
income, while the third quarter results in 2008 benefited from $824
million of pre-tax net mark-to-market gains on asset-backed hedges.
Non-recurring operating expenses for the third quarter of 2009 included
$21 million for Exelon defense costs and $6 million of transaction and
integration costs associated with the Company's acquisition of Reliant
Energy. Adjusted EBITDA, excluding MtM impacts, was a record of $906
million for the third quarter of 2009 compared to $682 million in the
third quarter of 2008. The $224 million quarter-over-quarter increase
was driven by Reliant Energy's adjusted EBITDA contribution of $306
million partially offset by an $82 million decrease in the wholesale
portfolio results.
Net income for the first nine months of 2009 was $909 million, or $3.29
per diluted common share, compared to $954 million, or $3.41 per diluted
common share, for the same period last year. Non-recurring operating
expenses for the first nine months of 2009 included $31 million of
Exelon defense costs and $41 million of transaction and integration
costs associated with the Company's acquisition of Reliant Energy on May
1, 2009. Adjusted EBITDA for the first nine months of 2009 was a record
$2,129 million compared to $1,889 million over the same period in 2008.
This $240 million increase was driven by Retail Energy's contribution of
$536 million offset by a $296 million decline in the performance of the
wholesale portfolio, primarily in the Texas and South Central regions.
Cash flow from operations was $1,280 million for the nine months ended
September 30, 2009, a $194 million increase from the same period in
2008. This increase was attributable to the financial performance from
Reliant Energy. Cash flow also benefited from first quarter collateral
returns partially offset by collateral posting obligations under the
Merrill Lynch Credit Sleeve. In addition, pension contributions were $35
million lower mainly due to a prepayment in 2008 related to 2009
contributions.
Total generation declined 8% in the third quarter of 2009 compared to
2008, which included a 13% decline in baseload generation. Lower
baseload generation attributable to market factors, particularly in the
Northeast, had minimal financial impact on the quarter as the portfolio
had been fully hedged. Maintenance and unplanned outages during the
quarter, primarily in Texas, contributed to the lower generation and
impacted the quarter's results. This decrease also was partially offset
by a 47% increase in gas fleet generation in Texas primarily due to the
newly constructed Cedar Bayou Unit 4 plant.
"NRG's record financial performance has been achieved in the most
challenging commodity price and economic environment NRG has ever
experienced. Our ability to operate and hedge our generation assets
coupled with our financial strength and ability to respond quickly to
market opportunities such as the Reliant acquisition sets us apart,"
commented David Crane, NRG President and Chief Executive Officer. "As we
look forward, while the commodity price environment remains challenging
in 2010, the opportunities in our sector to enhance shareholder value
for a Company in NRG's strong position are immense through our various
internal growth opportunities already underway. We are working hard to
repeat the success of 2009 in 2010."
Regional Segment Review of Results
Table 1: Three Months Income (Loss) from Continuing Operations before Income Taxes
($ in millions) Three Months Ended Nine Months Ended
Segment 9/30/09 9/30/08 9/30/09 9/30/08
Reliant Energy 176 - 287((5)) -
Texas 302 401 712 1,042
Northeast 124 97 261 263
South Central (18) 25 (12) 58
West 22 13 32 38
International 7 25 149 72
Thermal 1 4 6 11
Corporate ((1)) (186) (109) (414) (311)
Total, net of MtM Impacts 428 456 1,021 1,173
Add: MtM forward position accruals ((2)) (239) 479 70 171
Less: Prior period MtM reversals ((3)) (239) 7 (415) 32
Add: Hedge ineffectiveness((4)) 16 352 17 (27)
Total 444 1,280 1,523 1,285
((1)) Includes net interest expense of $144 million and $89 million for the third quarter of 2009 and 2008, and $341 million and $267 million for the nine months 2009 and 2008, respectively; and Exelon Defense and Reliant Integration costs of $27 million for the third quarter of 2009, and $72 million for the nine months of 2009. ((2)) Represents net MtM gains/(losses) on economic hedges that do not qualify for hedge accounting treatment. ((3)) Represents the reversal of MtM gains/(losses) previously recognized on economic hedges that do not qualify for hedge accounting treatment. ((4)) Represents ineffectiveness gains/(losses) due to a change in correlation, predominately between natural gas and power prices, on economic hedges that qualify for hedge accounting treatment. ((5)) Reliant Energy results are for the five months ended September 30, 2009.