Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - GenOn Energy, Inc. | c16718e8vk.htm |
| EX-3.1 - EXHIBIT 3.1 - GenOn Energy, Inc. | c16718exv3w1.htm |
| EX-99.2 - EXHIBIT 99.2 - GenOn Energy, Inc. | c16718exv99w2.htm |
Exhibit 99.1
For more information:
|
Dennis Barber, Investor Relations: | (832) 357-3042 | ||
| Laurie Fickman, Media Relations: | (832) 357-7720 |
FOR IMMEDIATE RELEASE
GenOn Reports 1st Quarter 2011 Results
| • | Merger integration proceeding smoothly | ||
| • | Increased expected annual merger cost savings starting in January 2012 from $150 million to $155 million |
HOUSTON, TX — May 9, 2011 — GenOn Energy, Inc. (NYSE:GEN) today reported adjusted EBITDA of $203
million for the first quarter of 2011 compared to $162 million for the same period of 2010.
Adjusted income from continuing operations was $5 million for the first quarter of 2011 compared to
$61 million for the same period last year. GenOn Energy reported a net loss of $113 million for
the first quarter of 2011 compared to net income of $407 million for the same period of 2010.
GenOn Energy was formed on December 3, 2010 through the merger of Mirant Corporation and RRI
Energy, Inc. The merger was accounted for as a reverse acquisition, and Mirant was deemed to be
the acquirer for accounting purposes. The consolidated financial statements therefore reflect
Mirant’s historical financial information through December 2, 2010 and GenOn’s results thereafter,
in accordance with the acquisition method of accounting for business combinations. On a pro forma
basis, adjusted EBITDA for the first quarter of 2010 was $189 million, the adjusted loss from
continuing operations was $6 million and net income was $220 million. The pro forma information
gives effect to the merger as if it had occurred on January 1, 2010.
“Our integration efforts are proceeding smoothly and we now expect to deliver $155 million of
annual cost savings beginning in 2012,” said Edward R. Muller, chairman and chief executive officer
of GenOn.
Guidance
GenOn updated adjusted EBITDA guidance for 2011 and 2012 to $558 million and $533 million,
respectively. The guidance is based on forward commodity prices on April 12, 2011. The previous
guidance for the same periods using January 31, 2011 forward commodity prices was $595 million and
$559 million for 2011 and 2012, respectively.
Financial Information
On March 31, 2011 GenOn had 771,243,978 common shares outstanding.
Net Income (Loss) to Adjusted Income (Loss) from Continuing Operations and Adjusted EBITDA
| Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||
| (in millions) | March 31, 2011 | March 31, 2010 | March 31, 2010 | |||||||||
| Pro Forma | ||||||||||||
Net Income (Loss) |
$ | (113 | ) | $ | 220 | $ | 407 | |||||
Unrealized (gains) losses on derivatives |
79 | (479 | ) | (352 | ) | |||||||
Merger-related costs |
23 | — | 2 | |||||||||
Impairment losses |
— | 248 | — | |||||||||
Other, net |
16 | 5 | 4 | |||||||||
Adjusted Income (Loss) from
Continuing Operations |
$ | 5 | $ | (6 | ) | $ | 61 | |||||
Provision for income taxes |
3 | — | — | |||||||||
Interest expense, net |
109 | 101 | 50 | |||||||||
Depreciation and amortization |
86 | 94 | 51 | |||||||||
Adjusted EBITDA |
$ | 203 | $ | 189 | $ | 162 | ||||||
Adjusted EBITDA was $203 million for the first quarter of 2011 compared to $189 million on a pro
forma basis for the same period of 2010. The improvement was primarily related to lower adjusted
operating and other expenses and increased realized value of hedges. These improvements were
partially offset by a reduction in energy gross margin as a result of reduced generation volumes in
Eastern PJM and lower contracted & capacity revenues from Eastern PJM and California.
The adjusted income from continuing operations was $5 million for the first quarter of 2011
compared to an adjusted loss from continuing operations of $6 million on a pro forma basis for the
same period of 2010. The improvement was primarily related to the same items that affected
adjusted EBITDA.
GenOn’s net loss was $113 million for the first quarter of 2011 compared to net income of $220
million on a pro forma basis for the same period of 2010. The decline was primarily a result of
lower unrealized gross margin and an increase in merger-related costs. These were partially offset
by impairment losses in 2010 related to the Elrama and Niles generating facilities that were not
repeated in 2011 and the same items that affected adjusted EBITDA.
Net cash provided by operating activities was $218 million for the first quarter of 2011 compared
to $304 million reported for the same period of 2010.
Total cash and cash equivalents at March 31, 2011 was approximately $2.4 billion. When taken
together with availability under existing credit facilities, GenOn’s total available liquidity at
March 31, 2011 was approximately $2.9 billion.
Total debt on March 31, 2011, excluding unamortized debt discounts and adjustments to fair value of
debt, was approximately $5 billion. Included in the total debt figure are $371 million of defeased
debt and $535 million of GenOn Americas Generation senior notes. The defeased debt, which
represents the PEDFA fixed-rate bonds, will be repaid with funds currently on deposit with an
escrow agent in the second quarter of 2011. The GenOn Americas Generation senior notes were repaid
during the second
quarter of 2011 with cash on hand. The unamortized debt discounts and adjustments to fair value of
debt totaled ($53) million.
Conference Call
GenOn Energy will host its first quarter 2011 earnings conference call beginning at 9:00 a.m.
Eastern Time on Monday, May 9, 2011. The conference call will be webcast live with audio and
slides at www.genon.com in the Investor Relations section. A replay of the call can be accessed
approximately two hours after the call’s completion.
About GenOn Energy, Inc.
GenOn Energy, Inc. (NYSE: GEN) is one of the largest competitive generators of wholesale
electricity in the United States. With power generation facilities located in key regions of the
country and a generation portfolio of approximately 24,200 megawatts, GenOn is helping meet the
nation’s electricity needs. GenOn’s portfolio of power generation facilities includes baseload,
intermediate and peaking units using coal, natural gas and oil to generate electricity. We have
experienced leadership, dedicated team members, financial strength and a solid commitment to
safety, the environment, operational excellence and the communities in which we operate. GenOn
routinely posts all important information on its Web site at www.genon.com.
Non-GAAP Financial Measures
This press release includes “non-GAAP financial measures” as defined in Regulation G under the
Securities Exchange Act of 1934, as amended. Reconciliations of these measures to the most directly
comparable GAAP measures are contained herein. This press release is available in the Investor
Relations section of our web site at www.genon.com. To the extent required, the Company has
included a more detailed description of each of the non-GAAP financial measures used in this press
release, together with a discussion of the usefulness and purpose of these measures as an exhibit
to the Company’s Current Report on Form 8-K furnished to the SEC with this press release, which is
also available on our web site.
Certain factors that could affect GAAP financial measures are not accessible on a forward-looking
basis, but could be material to future reported earnings and cash flow.
Net Income (Loss) to Adjusted Income (Loss) from Continuing Operations and Adjusted EBITDA
| Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||
| (in millions) | March 31, 2011 | March 31, 2010 | March 31, 2010 | |||||||||
| Pro Forma | ||||||||||||
Net Income (Loss) |
$ | (113 | ) | $ | 220 | $ | 407 | |||||
Unrealized (gains) losses on derivatives |
79 | (479 | ) | (352 | ) | |||||||
Merger-related costs |
23 | — | 2 | |||||||||
Impairment losses |
— | 248 | — | |||||||||
Lower of cost or market inventory adjustments, net |
(8 | ) | (14 | ) | 3 | |||||||
Loss on early extinguishment of debt |
24 | — | — | |||||||||
Western states litigation and similar settlements |
— | 17 | — | |||||||||
Other, net |
— | 2 | 1 | |||||||||
Adjusted Income (Loss) from Continuing Operations |
$ | 5 | $ | (6 | ) | $ | 61 | |||||
Provision for income taxes |
3 | — | — | |||||||||
Interest expense, net |
109 | 101 | 50 | |||||||||
Depreciation and amortization |
86 | 94 | 51 | |||||||||
Adjusted EBITDA |
$ | 203 | $ | 189 | $ | 162 | ||||||
Quarter Ended March 31, 2010 Pro Forma Net Income to Adjusted Income (Loss) from Continuing Operations and Adjusted EBITDA
| Pro Forma | ||||||||||||||||
| (in millions) | Reported | RRI Energy | Adjustments | Pro Forma | ||||||||||||
Net Income (Loss) |
$ | 407 | $ | (277 | ) | $ | 90 | $ | 220 | |||||||
Unrealized gains on derivatives |
(352 | ) | (127 | ) | — | (479 | ) | |||||||||
Merger-related costs |
2 | — | (2 | ) | — | |||||||||||
Impairment losses |
— | 248 | — | 248 | ||||||||||||
Other, net |
4 | 1 | — | 5 | ||||||||||||
Adjusted Income (Loss) from
Continuing Operations |
$ | 61 | $ | (155 | ) | $ | 88 | $ | (6 | ) | ||||||
Provision for income taxes |
— | 62 | (62 | ) | — | |||||||||||
Interest expense, net |
50 | 46 | 5 | 101 | ||||||||||||
Depreciation and amortization |
51 | 62 | (19 | ) | 94 | |||||||||||
Adjusted EBITDA |
$ | 162 | $ | 15 | $ | 12 | $ | 189 | ||||||||
Net Loss to Adjusted Loss from Continuing Operations and Adjusted EBITDA Guidance
| Year Ending | Year Ending | |||||||
| (in millions) | December 31, 2011 | December 31, 2012 | ||||||
Net Loss |
$ | (534 | ) | $ | (388 | ) | ||
Unrealized losses on derivatives |
249 | 183 | ||||||
Merger-related costs |
63 | 10 | ||||||
Other |
26 | — | ||||||
Adjusted Loss from Continuing Operations |
$ | (196 | ) | $ | (195 | ) | ||
Provision for income taxes |
— | — | ||||||
Interest expense, net |
394 | 358 | ||||||
Depreciation and amortization |
360 | 370 | ||||||
Adjusted EBITDA |
$ | 558 | $ | 533 | ||||
Forward Looking Statements
This press release contains statements, estimates or projections that constitute “forward-looking
statements” as defined under U.S. federal securities laws. In some cases, one can identify
forward-looking statements by terminology such as “will,” “expect,” “estimate,” “think,”
“forecast,” “guidance,” “outlook,” “plan,” “lead,” “project” or other comparable terminology.
Forward-looking statements are subject to certain risks and uncertainties that could cause actual
results to differ materially from our historical experience and our present expectations or
projections. These risks include, but are not limited to: (i) legislative and regulatory
initiatives or changes in regulations affecting the electric industry; (ii) changes in, or changes
in the application of, environmental or other laws and regulations; (iii) failure of our generating
facilities to perform as expected, including due to outages for unscheduled maintenance or repair;
(iv) changes in market conditions or the entry of additional competition in our markets; (v) the
ability to integrate successfully the businesses following the merger and realize cost savings and
any other synergies; and (vi) those factors contained in our periodic reports filed with the SEC,
including in the “Risk Factors” section of our most recent Annual Report on Form 10-K. The
forward-looking information in this document is given as of the date of the particular statement,
and we assume no duty to update this information. Our filings and other important information are
also available on the Investor Relations page of our web site at www.genon.com.
###