UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): August 13, 2013
 
NRG YIELD, INC.
(Exact name of Registrant as specified in its charter)
 
Delaware
(State or other jurisdiction of
incorporation)	001-36002
(Commission File Number)	46-1777204
(IRS Employer Identification No.)	
 
211 Carnegie Center, Princeton, New Jersey 08540
(Address of principal executive offices, including zip code)
 
(609) 524-4500
(Registrant’s telephone number, including area code)
 
N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o           Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
Item 2.02                                          Results of Operations and Financial Condition
 
On August 14, 2013, NRG Yield, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2013.  A copy of the press release is furnished as Exhibit 99.1 to this report on Form 8-K and is hereby incorporated by reference.
 
Item 9.01                                          Financial Statements and Exhibits
 
(d)        Exhibits
 
Exhibit
Number	 	Document	
 	 	 	
99.1	 	Press Release, dated August 14, 2013	
 
2

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	NRG Yield, Inc.	
 	(Registrant)	
 	 	
 	By:	/s/ David R. Hill	
 	 	David R. Hill	
 	 	Executive Vice President and	
 	 	General Counsel	
 
Dated: August 14, 2013
 
3

 
Exhibit Index
 
Exhibit
Number	 	Document	
99.1	 	Press Release, dated August 14, 2013	
 
4

EXHIBIT 99.1

 
NRG Yield, Inc. Announces Second Quarter 2013 Financial Results Following Successful Initial Public Offering
 
Business and Financial Highlights
 
·                 Closed Initial Public Offering (IPO) of 22,511,250 shares on July 22, 2013 at a price of $22 per share, above the initial pricing range of $19 - $21 per share
·                 Second Quarter Results:
·                 Adjusted EBITDA of $61 million
·                 Cash Available for Distribution of $32 million
·                 Pro-rated initial quarterly dividend of $0.23 per share of Class A common stock (based on initial quarterly dividend of $0.30)  expected to be declared and paid during the fourth quarter 2013
 
Providing Full Year 2013 and 2014 Guidance
 
·                 Adjusted EBITDA: $240 million and $285 million for 2013 and 2014, respectively
·                 Cash Available for Distribution: $72 million and $103 million for 2013 and 2014, respectively
 
Reaffirming Twelve Months Ending June 30, 2014 and June 30, 2015 Guidance
 
·                 Adjusted EBITDA: $282 million and $286 million for June 30, 2014 and June 30, 2015, respectively
·                 Cash Available for Distribution: $87 million and $105 million for June 30, 2014 and June 30, 2015, respectively
 
PRINCETON, NJ; August 14, 2013 — NRG Yield, Inc. (NYSE: NYLD) today reported second quarter 2013 financial and operating results. NRG Yield, Inc. closed its initial public offering on July 22, 2013 and the financial and operating results for the second quarter 2013 discussed below reflect the results of the predecessor of the Company.
 
“We are pleased to report strong financial and operating results for the first quarter following our successful initial public offering,” said NRG Yield Chairman, Chief Executive Officer and President David Crane. “We believe this marks the beginning of our effort to deliver a consistent, predictable and steadily growing stream of distributable cash flows from our contracted asset portfolio to our shareholders.”
 
Overview of Financial and Operating Results
 
Table 1: Selected Financial Results
 
 	 	Three Months Ended	 	Six Months Ended	 	
(dollars in millions)	 	6/30/13	 	6/30/12	 	6/30/13	 	6/30/12	 	
Operating Revenue	 	79	 	42	 	132	 	86	 	
Net Income	 	33	 	(1	)	40	 	4	 	
Adjusted EBITDA	 	61	 	25	 	95	 	50	 	
Cash Available for Distribution	 	32	 	13	 	27	 	14	 	
 
1

 
 
Table 2: Selected Operating Results
 
 	 	Three Months Ended	 	Six Months Ended	 	
(MWh and MWt in thousands)	 	6/30/13	 	6/30/12	 	6/30/13	 	6/30/12	 	
Equivalent Availability Factor (Conventional)	 	95.4	%	96.4	%	92.4	%	97.3	%	
Renewable Generation (MWh)	 	241	 	124	 	423	 	250	 	
Thermal Generation (MWht)	 	367	 	343	 	871	 	760	 	
 
NRG Yield reported net income for the quarter of $33 million. For the quarter, Adjusted EBITDA was $61 million and cash available for distribution was $32 million. Adjusted EBITDA was higher by $36 million, or 144%, when compared to the same quarter of 2012, primarily driven by assets that came online during the fourth quarter of 2012 through the first half of 2013. These assets include within our Renewable segment, all of the MWs associated with Avra Valley, Alpine, Borrego, and 105MWs from our 48.95% interest in CVSR, as well as Marsh Landing, which is within our Conventional segment.
 
Segment Results
 
Table 3: Adjusted EBITDA
 
(dollars in millions)	 	Three Months Ended	 	Six Months Ended	 	
Segment	 	6/30/13	 	6/30/12	 	6/30/13	 	6/30/12	 	
Conventional	 	26	 	8	 	34	 	16	 	
Renewable	 	28	 	10	 	45	 	19	 	
Thermal	 	9	 	9	 	20	 	19	 	
Corporate	 	(2	)	(2	)	(4	)	(4	)	
Adjusted EBITDA	 	61	 	25	 	95	 	50	 	
 
Table 4: Net Income/(Loss)
 
(dollars in millions)	 	Three Months Ended	 	Six Months Ended	 	
Segment	 	6/30/13	 	6/30/12	 	6/30/13	 	6/30/12	 	
Conventional	 	15	 	4	 	19	 	8	 	
Renewable	 	17	 	(7	)	21	 	(5	)	
Thermal	 	4	 	3	 	9	 	7	 	
Corporate	 	(3	)	(1	)	(9	)	(6	)	
Net Income/(Loss)	 	33	 	(1	)	40	 	4	 	
 
Liquidity and Capital Resources
 
Table 5: Liquidity
 
(dollars in millions)	 	6/30/13	 	12/31/12	 	
Cash and Cash Equivalents	 	17	 	22	 	
Restricted Cash	 	67	 	20	 	
Total Liquidity	 	84	 	42	 	
 
2

 
As of June 30, 2013, NRG Yield had total liquidity of $84 million, an increase of $42 million from December 31, 2012, driven by $21 million in 1603 cash grant proceeds from the Avra Valley solar project net of repayment of the cash grant bridge loan, as well as $23 million of cash held in reserve for remaining construction payments related to the Marsh Landing facility.
 
On July 22, 2013, the Company raised $468 million in its initial public offering with the sale of 22,511,250 shares of Class A common stock and used $395 million to purchase Class A units in NRG Yield LLC from NRG Energy Inc. representing a 29.1% interest. It also used $73 million to purchase an additional 3.5 million Class A units, or 5.4% interest, in NRG Yield LLC with such funds earmarked for general corporate purposes. Concurrently, NRG Yield LLC, through its ownership of NRG Yield Operating LLC, acquired a portfolio of solar, wind, and natural gas generation and thermal infrastructure assets, primarily located in the Northeast, Southwest and California regions of the United States from NRG Energy Inc. in return for 42,738,750 Class B units in NRG Yield LLC. In connection with the initial public offering NRG Yield LLC and NRG Yield Operating LLC entered into a $60 million senior secured revolving credit facility.
 
Guidance
 
NRG Yield is reaffirming the Adjusted EBITDA and Cash Available for Distribution guidance as forecasted in our prospectus of July 16, 2013 of $282 million and $87 million, respectively, for the twelve months ending June 30, 2014 and $286 million and $105 million, respectively, for the twelve months ending June 30, 2015. We are also providing Adjusted EBITDA guidance for the twelve months ending December 31, 2013 and 2014, of $240 million and $285 million respectively, and Cash Available for Distribution guidance for the twelve months ending December 31, 2013 and 2014 of $72 million and $103 million, respectively. Finally, we are also reaffirming our intention to pay a pro-rated initial quarterly dividend of $0.23 per share of Class A common stock (calculated from the closing date of the offering through and including September 30, 2013, and based on our initial quarterly dividend of $0.30) expected to be declared and paid during the fourth quarter 2013.
 
Table 6: Adjusted EBITDA and Cash Available for Distribution Guidance
 
 	 	For the twelve months ending	 	
(dollars in millions)	 	12/31/13	 	06/30/14	 	12/31/14	 	06/30/15	 	
Adjusted EBITDA	 	240	 	282	 	285	 	286	 	
Pro-rata Adjusted EBITDA from unconsolidated affiliates	 	(60	)	(70	)	(75	)	(74	)	
Cash distributions from unconsolidated affiliates	 	20	 	22	 	38	 	44	 	
Cash interest paid	 	(58	)	(72	)	(65	)	(63	)	
Maintenance capital expenditures	 	(16	)	(12	)	(10	)	(12	)	
Change in other assets	 	12	 	1	 	1	 	1	 	
Principal amortization of indebtedness	 	(66	)	(64	)	(71	)	(77	)	
Estimated Cash Available for Distribution	 	72	 	87	 	103	 	105	 	
 
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
 
3

 
steam, hot water and/or chilled water, and in some instances electricity, to commercial businesses, universities, hospitals and governmental units in ten locations. NRG Yield is traded on the New York Stock Exchange under the symbol NYLD. Visit nrgyield.com for more information.
 
Safe Harbor Disclosure
 
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 our Adjusted EBITDA, cash available for distribution, expected earnings, future growth and financial performance, 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 and of environmental emissions, 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 identify or successfully implement acquisitions, our ability to enter into new contracts as existing contracts expire, our ability to obtain anticipated Section 1603 Cash Grants and our ability to maintain and grow our quarterly dividends. Furthermore, any dividends are subject to available capital, market conditions, and compliance with associated laws and regulations.
 
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 Adjusted EBITDA and cash available for distribution are estimates as of today’s date, August 14, 2013, and are based on assumptions believed to be reasonable as of this date. NRG Yield expressly disclaims any current intention to update such guidance. 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 at www.sec.gov. In addition, NRG Yield makes available free of charge at www.nrgyield.com, copies of materials it files with, or furnish to, the SEC.
 
Contacts:
 
Media:	 	Investors:	
 	 	 	
Karen Cleeve	 	 	Chad Plotkin	
609.524.4608	 	 	609.524.4526	
 	 	 	
Michelle Tsai	 	 	
609.524.5324	 	 	
 
4

 
NRG YIELD
 
COMBINED STATEMENTS OF OPERATIONS
 
(Unaudited)
 
 	 	Three months ended
June 30,	 	Six months ended
June 30,	 	
(In millions, except for per share amounts)	 	2013	 	2012	 	2013	 	2012	 	
Operating Revenues	 	 	 	 	 	 	 	 	 	
Total operating revenues	 	$	79	 	$	42	 	$	132	 	$	86	 	
Operating Costs and Expenses	 	 	 	 	 	 	 	 	 	
Cost of operations	 	30	 	26	 	59	 	53	 	
Depreciation and amortization	 	9	 	6	 	19	 	12	 	
General and administrative — affiliate	 	2	 	2	 	4	 	4	 	
Total operating costs and expenses	 	41	 	34	 	82	 	69	 	
Operating Income	 	38	 	8	 	50	 	17	 	
Other Income/(Expense)	 	 	 	 	 	 	 	 	 	
Equity in earnings of unconsolidated affiliates	 	2	 	6	 	6	 	9	 	
Interest expense	 	(6	)	(16	)	(11	)	(20	)	
Total other expense	 	(4	)	(10	)	(5	)	(11	)	
Income/(Loss) Before Income Taxes	 	34	 	(2	)	45	 	6	 	
Income tax expense/(benefit)	 	1	 	(1	)	5	 	2	 	
Net Income/(Loss)	 	33	 	(1	)	40	 	4	 	

See accompanying notes to combined financial statements.
 
5

 
NRG YIELD
 
COMBINED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
 
(Unaudited)
 
 	 	Three months ended
June 30,	 	Six months ended
June 30,	 	
 	 	2013	 	2012	 	2013	 	2012	 	
 	 	 	 	 	 	 	 	 	 	
Net Income/(Loss)	 	$	33	 	$	(1	)	$	40	 	$	4	 	
Other Comprehensive Income, net of tax	 	 	 	 	 	 	 	 	 	
Unrealized gain/(loss) on derivatives, net of income taxes of $13, $3, $15 and $5	 	18	 	(5	)	19	 	(7	)	
Other comprehensive income/(loss)	 	18	 	(5	)	19	 	(7	)	
Comprehensive Income/(Loss)	 	51	 	(6	)	59	 	(3	)	

See accompanying notes to combined financial statements.
 
6

 
NRG YIELD
 
COMBINED BALANCE SHEETS
 
(In millions, except shares)	 	June 30, 2013	 	December 31, 2012	 	
 	 	(unaudited)	 	 	 	
ASSETS	 	 	 	 	 	
Current Assets	 	 	 	 	 	
Cash and cash equivalents	 	$	17	 	$	22	 	
Restricted cash	 	67	 	20	 	
Accounts receivable, net — trade	 	37	 	22	 	
Due from NRG and subsidiaries	 	8	 	—	 	
Inventory	 	9	 	5	 	
Notes receivable — external	 	10	 	9	 	
Renewable energy grant receivable	 	101	 	—	 	
Deferred income taxes	 	10	 	1	 	
Prepayments and other current assets	 	9	 	2	 	
Total current assets	 	268	 	81	 	
Property, plant and equipment, net of accumulated depreciation of $134 and $115	 	1,492	 	1,598	 	
Other Assets	 	 	 	 	 	
Equity investments in affiliates	 	243	 	220	 	
Notes receivable — affiliate	 	3	 	6	 	
Notes receivable — external	 	7	 	8	 	
Intangible assets, net of accumulated amortization of $5 and $3	 	30	 	30	 	
Derivative instruments	 	6	 	—	 	
Other non-current assets	 	25	 	21	 	
Total other assets	 	314	 	285	 	
Total Assets	 	$	2,074	 	$	1,964	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	
Current Liabilities	 	 	 	 	 	
Current portion of long-term debt	 	$	126	 	$	58	 	
Accounts payable — trade	 	15	 	166	 	
Due to NRG and subsidiaries	 	37	 	26	 	
Derivative instruments	 	23	 	19	 	
Accrued expenses and other current liabilities	 	11	 	16	 	
Total current liabilities	 	212	 	285	 	
Other Liabilities	 	 	 	 	 	
Long-term debt — external	 	1,051	 	723	 	
Long-term debt — affiliate	 	25	 	26	 	
Deferred income taxes	 	33	 	4	 	
Derivative instruments	 	26	 	61	 	
Other non-current liabilities	 	30	 	25	 	
Total non-current liabilities	 	1,165	 	839	 	
Total Liabilities	 	1,377	 	1,124	 	
Commitments and Contingencies	 	 	 	 	 	
Stockholders’ Equity	 	 	 	 	 	
Additional paid-in capital	 	639	 	834	 	
Retained earnings	 	63	 	30	 	
Accumulated other comprehensive loss	 	(5	)	(24	)	
Total Stockholders’ Equity	 	697	 	840	 	
Total Liabilities and Stockholders’ Equity	 	$	2,074	 	$	1,964	 	
 
See accompanying notes to combined financial statements.
 
7

 
NRG YIELD
 
COMBINED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
 	 	Six months ended June 30,	 	
 	 	2013	 	2012	 	
 	 	(In millions)	 	
Cash Flows from Operating Activities	 	 	 	 	 	
Net income	 	$	40	 	$	4	 	
Adjustments to reconcile net income to net cash (used)/provided by operating activities:	 	 	 	 	 	
Distributions and equity in earnings of unconsolidated affiliates	 	3	 	3	 	
Depreciation and amortization	 	19	 	12	 	
Amortization of financing costs and debt discount/premiums	 	1	 	(1	)	
Amortization of intangibles and out-of-market contracts	 	1	 	1	 	
Changes in deferred income taxes	 	5	 	2	 	
Changes in derivative instruments	 	(10	)	11	 	
Changes in other working capital	 	(70	)	26	 	
Net Cash Used by Operating Activities	 	(11	)	58	 	
Cash Flows from Investing Activities	 	 	 	 	 	
Capital expenditures	 	(182	)	(156	)	
(Increase)/decrease in restricted cash, net	 	(47	)	1	 	
Decrease/(increase) in notes receivable	 	3	 	(12	)	
Proceeds from renewable energy grants	 	24	 	25	 	
Investments in unconsolidated affiliates	 	(19	)	(2	)	
Net Cash Used by Investing Activities	 	(221	)	(144	)	
Cash Flows from Financing Activities	 	 	 	 	 	
Capital contributions from NRG	 	150	 	142	 	
Dividends and returns of capital to NRG	 	(312	)	(23	)	
Proceeds from issuance of long-term debt — external	 	420	 	10	 	
Payment of debt issuance costs	 	(4	)	(8	)	
Payments for long-term debt — external	 	(25	)	(27	)	
Payments for long-term debt — affiliate	 	(2	)	(5	)	
Net Cash Provided by Financing Activities	 	227	 	89	 	
Net (Decrease)/Increase in Cash and Cash Equivalents	 	(5	)	3	 	
Cash and Cash Equivalents at Beginning of Period	 	22	 	24	 	
Cash and Cash Equivalents at End of Period	 	$	17	 	$	27	 	
 
See accompanying notes to combined financial statements.
 
8

 
Appendix Table A-1: Second Quarter 2013 Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
(dollars in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	15	 	17	 	4	 	(3	)	33	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	1	 	1	 	
Interest Expense, net	 	4	 	—	 	2	 	—	 	6	 	
Depreciation and Amortization Expense	 	2	 	4	 	3	 	—	 	9	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	5	 	7	 	—	 	—	 	12	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	26	 	28	 	9	 	(2	)	61	 	
 
Appendix Table A-2: Second Quarter 2012 Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
(dollars in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	4	 	(7	)	3	 	(1	)	(1	)	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	(1	)	(1	)	
Interest Expense, net	 	—	 	14	 	2	 	—	 	16	 	
Depreciation and Amortization Expense	 	—	 	2	 	4	 	—	 	6	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	4	 	1	 	—	 	—	 	5	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	8	 	10	 	9	 	(2	)	25	 	
 
9

 
Appendix Table A-3: YTD June 30, 2013 Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
(dollars in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	19	 	21	 	9	 	(9	)	40	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	5	 	5	 	
Interest Expense, net	 	4	 	3	 	4	 	—	 	11	 	
Depreciation and Amortization Expense	 	2	 	10	 	7	 	—	 	19	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	9	 	11	 	—	 	—	 	20	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	34	 	45	 	20	 	(4	)	95	 	
 
Appendix Table A-4: YTD June 30, 2012 Segment Adjusted EBITDA Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
(dollars in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	8	 	(5	)	7	 	(6	)	4	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	2	 	2	 	
Interest Expense, net	 	—	 	16	 	4	 	—	 	20	 	
Depreciation and Amortization Expense	 	—	 	4	 	8	 	—	 	12	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	8	 	4	 	—	 	—	 	12	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	16	 	19	 	19	 	(4	)	50	 	
 
10

 
Appendix A-5: Cash Available for Distribution Reconciliation
The following table summarizes the calculation of cash available for distribution and provides a reconciliation to adjusted EBITDA:
 
 	 	Three Months Ended	 	Six Months Ended	 	
(dollars in millions)	 	6/30/13	 	6/30/12	 	6/30/13	 	6/30/12	 	
Adjusted EBITDA	 	61	 	25	 	95	 	50	 	
Pro-rata Adjusted EBITDA from unconsolidated affiliates	 	(14	)	(11	)	(26	)	(21	)	
Cash distributions from unconsolidated affiliates	 	8	 	7	 	9	 	12	 	
Cash interest paid	 	(7	)	—	 	(19	)	(9	)	
Maintenance Capital expenditures	 	(1	)	—	 	(4	)	(3	)	
Change in other assets	 	(5	)	—	 	(5	)	—	 	
Principal amortization of indebtedness	 	(10	)	(8	)	(23	)	(15	)	
Cash Available for Distribution	 	32	 	13	 	27	 	14	 	
 
Appendix Table A-6: Adjusted EBITDA Guidance Reconciliation
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income:
 
 	 	For the Twelve Months Ending	 	
(dollars in millions)	 	12/31/13	 	06/30/14	 	12/31/14	 	06/30/15	 	
Net Income	 	77	 	64	 	58	 	62	 	
Adjustments to net income to arrive at Adjusted EBITDA:	 	 	 	 	 	 	 	 	 	
Interest income	 	—	 	(1	)	—	 	(1	)	
Depreciation and amortization	 	51	 	65	 	66	 	67	 	
Interest expense, net	 	45	 	68	 	66	 	64	 	
Contract amortization	 	1	 	1	 	1	 	1	 	
Income tax expense	 	30	 	43	 	41	 	41	 	
Adjustment to reflect pro-rata Adjusted EBITDA from unconsolidated affiliates	 	36	 	42	 	53	 	52	 	
Adjusted EBITDA	 	240	 	282	 	285	 	286	 	
 
11

 
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’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;
·                 EBITDA does not reflect changes in, or cash requirements for, working capital needs;
·                 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
·                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 supplementally. 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.
 
12