NRG Energy, Inc. (NRG Energy) has reported cash flow from operations of $1.4 billion for the year-end 2008, compared with the cash flow from operations of $1.5 billion in the previous year-end. It has also reported adjusted EBITDA, excluding MTM of $2.3 billion for the full year-end 2008, compared with adjusted EBITDA, excluding MTM of $2.2 billion in the previous year-end.
$1.4 billion in 2008 annual Cash from Operations; $1.8 billion excluding the impact of collateral deposits;
$2.2 billion adjusted EBITDA guidance for 2009, which remains unchanged from previous guidance; and
$3.4 billion in total liquidity, excluding cash collateral deposits.
Preliminary adjusted EBITDA results, however, are lower than previously issued guidance of $2,400 million, caused by a number of items, including the impact of incorrectly increasing guidance for the non-cash effects of energy option revenues. The impact of correcting the effect of energy option revenues on previously reported financial statements is not material.
NRG ended the year with $3,364 million in total liquidity, excluding cash collateral posted by hedge counterparties, as continued strong operating cash flows and a reduction in letters of credit outstanding, primarily the result of lower commodity prices and hedge counterparties migrating from NRG’s second lien collateral structure to the first lien structure, contributed to higher cash balances and greater LC capacity.
Cash from operations guidance for 2009 is being increased by $200 million, from $1,300 million to $1,500 million, as cash taxes are anticipated to be significantly lower due to accelerated utilization of tax loss carry forwards generated in prior years.
“That the company succeeded in surmounting the extraordinary challenges of 2008 to achieve the best financial results in NRG’s history in terms of both adjusted EBITDA and, particularly, cash from operations before collateral movements, is a testament to the professionalism of NRG’s dedicated employees,” said David Crane, president and chief executive officer of the comapny. “While we would have liked to achieve our revised 2008 EBITDA guidance, we are very pleased with the company’s overall financial performance especially given the present environment.”
“While energy related commodities are experiencing significant and rapid market price declines, we have protected our portfolio and the stability of our company’s cash flows through our risk management and hedging activities,” said Clint Freeland, chief financial officer of NRG Energy. “We remain on course to deliver our 2009 adjusted EBITDA goal, and through effective tax planning we are able to increase our 2009 cash flow guidance by $200 million.”