Desert Sunlight acquisition to increase contracted solar portfolio by
137.5 megawatts
PRINCETON, N.J.--(BUSINESS WIRE)--Jun. 18, 2015--
NRG Yield, Inc. (NYSE:NYLD, NYLD.A), through its subsidiary NRG Yield
Operating LLC, has entered into an agreement with GE Unit (NYSE: GE) GE
Energy Financial Services to acquire its 25 percent interest in the
Desert Sunlight Solar Farm in Riverside, CA for $285 million, subject to
customary working capital adjustments, plus the assumption of $287.4
million of non-recourse project level debt. The acquisition, which
provides NRG Yield with a total ownership of 137.5 megawatts (MW) of
operating solar capacity, will place NRG Yield into a partnership with
subsidiaries of NextEra Energy and Sumitomo Financial, who are the 50
percent and 25 percent owners of Desert Sunlight, respectively.
The transaction is expected to increase both the annual run-rate EBITDA
by approximately $45 million and cash available for distribution by
approximately $22 million by 2016.
“The acquisition of an interest in the largest operating solar
farm in North America highlights not only our continued commitment to
carbon-free generation, but also the strength of our acquisition
capabilities to compete for contracted assets of world-class quality in
a historically competitive marketplace," said David Crane, NRG Yield’s
Chairman and Chief Executive Office. "Desert Sunlight furthers our
objective of sustainable and visible dividend growth for our investors
while bolstering our generation of carbon-free electricity for thousands
of homes through utility scale solar investments.”
Desert Sunlight Highlights:
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Contracted long-term power purchase agreements with Southern
California Edison (250 MW) and Pacific Gas & Electric (300 MW) having
20 years and 25 years of remaining contract life, respectively
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Located in a premier solar resource area with over 30 years of
operating solar history
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First Solar (NYSE: FSLR) permitted, constructed and is now operating
the plant, which utilizes over 8 million First Solar CdTe Thin Film
modules, with commercial operation achieved for the entire farm in
December 2014
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Expected to be immediately accretive to cash available for
distribution per share
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Attractive long-term debt financing in place, with 80 percent of debt
service supported by a DOE loan guarantee
NRG Yield expects to close the transaction by June 30, 2015. The
transaction is subject to customary closing conditions, including
approvals by the Federal Energy Regulatory Commission and notice of the
acquisition to the California Public Utilities Commission.
With this acquisition, NRG Yield now owns nearly 600 megawatts of solar
generation. NRG Yield is supported by its parent, NRG Energy, Inc.,
which owns and operates approximately 1.2 gigawatts of solar generation,
thus implying a combined solar portfolio of 1.8 gigawatts.
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. Visit nrgyield.com for more information.
Forward-Looking Statements
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 NRG
Yield’s expectations regarding the anticipated benefits of the
acquisition of Desert Sunlight 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, 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
successfully close the Desert Sunlight acquisition (including receipt of
third party consents and regulatory approvals), failure to identify or
successfully execute other acquisitions, NRG Yield’s ability to enter
into new contracts as existing contracts expire, NRG Yield’s ability to
acquire assets from NRG Energy, Inc. or third parties, NRG Yield’s
ability to close the drop-down transactions, and NRG Yield’s ability to
maintain and grow its quarterly dividends.
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 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.
Appendix A-1: Adjusted EBITDA and Cash Available for Distribution
Reconciliation
The following table summarizes the calculation of adjusted EBITDA and
cash available for distribution to net income:
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Run
Rate
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($ in millions)
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Net Income
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13
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Adjustments to net income to arrive at
Adjusted EBITDA:
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Adjustment to reflect NRG share of Adjusted
EBITDA in
unconsolidated affiliates
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32
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Adjusted EBITDA
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45
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Pro-rata Adjusted EBITDA from
unconsolidated affiliates
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(45)
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Cash distributions from unconsolidated
affiliates
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22
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Cash Available for Distribution
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22
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EBITDA and Adjusted EBITDA are non-GAAP financial measures. These
measurements are not recognized in accordance with GAAP and should not
be viewed as an alternative to GAAP measures of performance. The
presentation of Adjusted EBITDA should not be construed as an inference
that NRG Yield’s future results will be unaffected by unusual or
non-recurring items.
EBITDA represents net income before interest (including loss on debt
extinguishment), taxes, depreciation and amortization. EBITDA is
presented because NRG Yield considers it an important supplemental
measure of its performance and believes debt-holders frequently use
EBITDA to analyze operating performance and debt service capacity.
EBITDA has limitations as an analytical tool, and you should not
consider it in isolation, or as a substitute for analysis of our
operating results as reported under GAAP. Some of these limitations are:
-
EBITDA does not reflect cash expenditures, or future requirements for
capital expenditures, or contractual commitments;
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EBITDA does not reflect changes in, or cash requirements for, working
capital needs;
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EBITDA does not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments, on
debt or cash income tax payments;
-
Although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be replaced
in the future, and EBITDA does not reflect any cash requirements for
such replacements; and
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Other companies in this industry may calculate EBITDA differently than
NRG Yield does, limiting its usefulness as a comparative measure.
Because of these limitations, EBITDA should not be considered as a
measure of discretionary cash available to use to invest in the growth
of NRG Yield’s business. NRG Yield compensates for these limitations by
relying primarily on our GAAP results and using EBITDA and Adjusted
EBITDA only as supplements. See the statements of cash flow included in
the financial statements that are a part of this news release.
Adjusted EBITDA is presented as a further supplemental measure of
operating performance. Adjusted EBITDA represents EBITDA adjusted for
mark-to-market gains or losses, asset write offs and impairments; and
factors which we do not consider indicative of future operating
performance. The reader is encouraged to evaluate each adjustment and
the reasons NRG Yield considers it appropriate for supplemental
analysis. As an analytical tool, Adjusted EBITDA is subject to all of
the limitations applicable to EBITDA. In addition, in evaluating
Adjusted EBITDA, the reader should be aware that in the future NRG Yield
may incur expenses similar to the adjustments in this news release.
Cash available for distribution is Adjusted EBITDA plus cash dividends
from unconsolidated affiliates, less maintenance capital expenditures,
pro-rata adjusted EBITDA from unconsolidated affiliates, cash interest
paid, income taxes paid, principal amortization of indebtedness and
changes in others assets. Management believes cash available for
distribution is a relevant supplemental measure of the Company’s ability
to earn and distribute cash returns to investors.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150618005326/en/
Source: NRG Yield, Inc.
NRG Yield, Inc.
Media:
Karen Cleeve, 609-524-4608
or
Investors:
Matt
Orendorff, 609-524-4526
or
Lindsey Puchyr, 609-524-4527
