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): November 12, 2013
 
NRG YIELD, INC.
(Exact name of Registrant as specified in its charter)
 
Delaware	 	001-36002	 	46-1777204	
(State or other jurisdiction of
incorporation)	 	(Commission File Number)	 	(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 November 12, 2013, NRG Yield, Inc. issued a press release announcing its financial results for the quarter ended September 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 November 12, 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: November 12, 2013	 	
 
3

 
Exhibit Index
 
Exhibit
Number	 	Document	
 	 	 	
99.1	 	Press Release, dated November 12, 2013	
 
4

Exhibit 99.1

 
NRG Yield, Inc. Reports Third Quarter Results; Declared Initial Quarterly Dividend and Announces Dividend Policy
 
Business and Financial Highlights
 
·                 $83 million of Adjusted EBITDA in the third quarter and $178 million for the first nine months of 2013
·                 $56 million of Cash Available for Distribution (CAFD) in the third quarter and $83 million for the first nine months of 2013
·                 $272 million in total liquidity as of September 30, 2013
·                 Declared pro-rated initial quarterly dividend of $0.23 per share of Class A common stock (based on initial quarterly dividend of $0.30 or $1.20 on an annual basis), to be paid on December 16, 2013 for shareholders of record on December 2, 2013
 
2013 and 2014 Guidance
 
·                 Revising 2013 Guidance as follows:
 
·                 Adjusted EBITDA guidance confirmed at $240 million
·                 CAFD increases from $72 million to $81 million
 
·                 Maintaining 2014 Guidance as follows:
 
·                 Adjusted EBITDA guidance at $285 million without taking into account any of the NRG ROFO assets
·                 CAFD at $103 million
 
NRG Yield Inc. closed on its initial public offering (IPO) on July 22, 2013. Results for periods prior to the IPO are attributable to its predecessor.
 
PRINCETON, NJ; November 12, 2013 — NRG Yield, Inc. (NYSE: NYLD) today reported third quarter 2013 Adjusted EBITDA of $83 million and $178 million for the nine months ended September 30, 2013. Net income for the nine months ended September 30, 2013 was $85 million, while net income attributable to NRG Yield, Inc. subsequent to the IPO was $9 million, or $0.39 per diluted Class A common share.
 
“As we anticipated, NRG Yield’s stable portfolio of operating assets have produced strong and steady financial results for the third quarter,” said NRG Yield’s Chairman and Chief Executive Officer David Crane. “Importantly, we are pleased to have declared our first quarterly dividend, further establishing NRG Yield as the leading dividend growth investment vehicle in the power industry.”
 
1

 
Overview of Financial and Operating Results
 
Table 1: Selected Financial Results
 
 	 	Three Months Ended	 	Nine Months Ended	 	
($ in millions)	 	9/30/13	 	9/30/12	 	9/30/13	 	9/30/12	 	
Operating Revenue	 	95	 	47	 	227	 	133	 	
Net Income	 	40	 	4	 	85	 	8	 	
Adjusted EBITDA	 	83	 	29	 	178	 	79	 	
Cash Available for Distribution	 	56	 	12	 	83	 	26	 	
 
Table 2: Selected Operating Results
 
 	 	Three Months Ended	 	Nine Months Ended	 	
 	 	9/30/13	 	9/30/12	 	9/30/13	 	9/30/12	 	
Equivalent Availability Factor (Conventional)	 	98.9	%	62.8	%	97.5	%	86.1	%	
Renewable Generation (MWh in ‘000s)	 	263	 	109	 	764	 	385	 	
Thermal Generation (MWht in ‘000s)	 	380	 	384	 	1,251	 	1,144	 	
 
Segment Results
 
Table 3: Adjusted EBITDA
 
($ in millions)	 	Three Months Ended	 	Nine Months Ended	 	
Segment	 	9/30/13	 	9/30/12	 	9/30/13	 	9/30/12	 	
Conventional	 	36	 	7	 	70	 	23	 	
Renewable	 	35	 	10	 	80	 	29	 	
Thermal	 	13	 	14	 	33	 	33	 	
Corporate	 	(1	)	(2	)	(5	)	(6	)	
Adjusted EBITDA	 	83	 	29	 	178	 	79	 	
 
Table 4: Net Income
 
($ in millions)	 	Three Months Ended	 	Nine Months Ended	 	
Segment	 	9/30/13	 	9/30/12	 	9/30/13	 	9/30/12	 	
Conventional	 	24	 	3	 	43	 	11	 	
Renewable	 	16	 	3	 	37	 	(2	)	
Thermal	 	6	 	8	 	15	 	15	 	
Corporate	 	(6	)	(10	)	(10	)	(16	)	
Adjusted EBITDA	 	40	 	4	 	85	 	8	 	
 
Third quarter Adjusted EBITDA was $83 million; $54 million higher than third quarter 2012 resulting from the achievement of commercial operations of assets in both the Renewable and Conventional segments.
 
2

 
Operational Performance
 
For the three months ended September 30, 2013, total generation for the Company’s renewable assets was 263 MWh, which was 141% higher than during the same period in 2012 driven primarily by the recent completion of certain of the Company’s solar assets. On October 31, 2013, the Company’s partially-owned (48.95%) California Valley Solar Ranch 250 MW facility achieved full commercial operations. Equivalent Availability Factor (EAF) for the Company’s conventional assets for the three months ended September 30, 2013 was 98.9% compared to 62.8% during the same period in 2012. This increase was primarily attributable to operations at the GenConn Middletown facility, which experienced a forced outage in 2012 due to the replacement of certain transmission equipment.
 
Liquidity and Capital Resources
 
Table 5: Liquidity
 
($ in millions)	 	9/30/13	 	12/31/12	 	
Cash and Cash Equivalents	 	121	 	22	 	
Restricted Cash	 	91	 	20	 	
Total Cash	 	212	 	42	 	
Revolver Availability	 	60	 	—	 	
Total Liquidity	 	272	 	42	 	
 
Total liquidity as of September 30, 2013 was $272 million, an increase of $230 million from December 31, 2012. This increase includes $60 million in availability under the Company’s revolving credit facility and net cash inflows of $170 million, consisting of the following items:
 
·                 $1,170 million of cash inflows through September 2013, consisting of the following items:
 
·                 $468 million of proceeds from the IPO;
·                 $420 million of proceeds from the issuance of long-term debt;
·                 $150 million in capital contributions from NRG Energy, Inc. (NYSE: NRG);
·                 $103 million in cash flows from operations;
·                 $24 million from cash grant proceeds; and
·                 $5 million in reimbursement from transmission operators for interconnection upgrades.
 
·                 Partially offset by $1,000 million of cash outflows through September 2013, consisting of the following items:
 
·                 $707 million of distributions and return of capital to NRG Energy, Inc. of which $395 million related to the purchase of 19,011,250 Class A Units in NRG Yield LLC;
·                 $232 million in capital expenditures;
·                 $42 million in debt payments and debt issuance costs; and
·                 $19 million in investment in unconsolidated affiliates primarily related to our investment in CVSR.
 
Initial Quarterly Dividend
 
On October 31, 2013, the Company’s board of directors declared its pro-rated initial quarterly dividend of $0.23 per Class A common share (based on initial quarterly dividend of $0.30 or $1.20 per share on an annualized basis). The dividend is payable December 16, 2013, to shareholders of record as of December 2, 2013.
 
3

 
Dividend Policy
 
NRG Yield has adopted a policy of growing its dividend from the current $1.20/share to $1.45/share by the third quarter of 2014; thereafter, the Company expects to increase the dividend quarterly by 1%. These regular dividend increases will be augmented by NRG ROFO assets, financing and third party acquisition activities that the Company expects will lead to sustainable increases in the Company’s CAFD. NRG Yield targets a 10-15% dividend per Class A common share compound annual growth rate over the next five years while maintaining a prudent payout ratio.
 
Potential Drop-Down Assets from NRG Energy
 
NRG Energy, Inc. has announced its intention to offer NRG Yield the following NRG ROFO assets through 2014:
 
·                 TA High Desert — 20 MW solar facility located in LA County, CA
·                 RE Kansas South — 20 MW solar facility located in Kings County, CA
·                 El Segundo Energy Center — 550 MW fast start natural gas-fired facility located in LA County, CA
·                 CVSR — Remaining NRG interest in this 250 MW solar facility located in San Luis Obispo County, CA
 
Guidance
 
NRG Yield is maintaining Adjusted EBITDA guidance for full year 2013 and 2014, at $240 million and $285 million, respectively. The Company is increasing CAFD guidance for 2013 to $81 million as a result of lower maintenance capital expenditure and maintaining CAFD guidance for 2014 at $103 million.
 
Table 6: Adjusted EBITDA and Cash Available for Distribution Guidance
 
 	 	11/12/13	 	08/14/13	 	
($ in millions)	 	2013	 	2014	 	2013	 	2014	 	
Adjusted EBITDA	 	240	 	285	 	240	 	285	 	
Pro-rata Adjusted EBITDA from unconsolidated affiliates	 	(60	)	(75	)	(60	)	(75	)	
Cash distributions from unconsolidated affiliates	 	20	 	38	 	20	 	38	 	
Cash interest paid	 	(55	)	(65	)	(58	)	(65	)	
Maintenance capital expenditures	 	(9	)	(10	)	(16	)	(10	)	
Change in other assets	 	12	 	1	 	12	 	1	 	
Principal amortization of indebtedness	 	(67	)	(71	)	(66	)	(71	)	
Estimated Cash Available for Distribution	 	81	 	103	 	72	 	103	 	
 
Seasonality
 
NRG Yield’s quarterly operating results and CAFD are significantly impacted by seasonal factors. The majority of NRG Yield’s revenues are generated during the months of May through September, as contracted pricing and renewable resources are at their highest levels in the Company’s core markets. The factors driving the fluctuation in Adjusted EBITDA and CAFD include the following:
 
·                 Higher summer capacity prices from conventional assets
·                 Higher solar intensity during the summer months
·                 Debt service payments which are disbursed either quarterly or semi-annually
 
In deriving the dividend payout ratio, the Company takes into consideration the timing of such revenues and costs to ensure sufficient funds are available for distribution on a quarterly basis.
 
4

 
Earnings Conference Call
 
On November 12, 2013, NRG Yield will host a conference call at 10:30 am Eastern to discuss these results. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation materials by logging on to NRG Yield’s website at http://www.nrgyield.com and clicking on “Investors.” The webcast will be archived on the site for those unable to listen in real time.
 
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 1 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. 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 (including receipt of third party consents and regulatory approvals), 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, November 12, 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	
 	 	 	
Dave Knox	 	Daniel Keyes	
713.537.2130	 	609-524-4527	
 
5

 
NRG YIELD, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Unaudited)
 
 	 	Three months ended
September 30,	 	Nine months ended
September 30,	 	
(In millions, except per share amounts)	 	2013	 	2012	 	2013	 	2012	 	
Operating Revenues	 	 	 	 	 	 	 	 	 	
Total operating revenues	 	$	95	 	$	47	 	$	227	 	$	133	 	
Operating Costs and Expenses	 	 	 	 	 	 	 	 	 	
Cost of operations	 	33	 	28	 	92	 	81	 	
Depreciation and amortization	 	16	 	6	 	35	 	18	 	
General and administrative — affiliate	 	1	 	2	 	5	 	6	 	
Total operating costs and expenses	 	50	 	36	 	132	 	105	 	
Operating Income	 	45	 	11	 	95	 	28	 	
Other Income/(Expense)	 	 	 	 	 	 	 	 	 	
Equity in earnings of unconsolidated affiliates	 	12	 	6	 	18	 	15	 	
Other income, net	 	1	 	—	 	1	 	—	 	
Interest expense	 	(13	)	(5	)	(24	)	(25	)	
Total other income/(expense)	 	—	 	1	 	(5	)	(10	)	
Income Before Income Taxes	 	45	 	12	 	90	 	18	 	
Income tax expense	 	5	 	8	 	5	 	10	 	
Net Income	 	$	40	 	$	4	 	$	85	 	$	8	 	
Less: Predecessor income prior to initial public offering on July 22, 2013	 	9	 	 	 	54	 	 	 	
Net Income Subsequent to Initial Public Offering	 	31	 	 	 	$	31	 	 	 	
Less: Net income attributable to noncontrolling interest	 	22	 	 	 	 	 	 	 	
Net Income Attributed to NRG Yield Inc. Subsequent to Initial Public Offering	 	$	9	 	 	 	 	 	 	 	
Earnings Per Share Attributable to NRG Yield, Inc. Class A Common Stockholders	 	 	 	 	 	 	 	 	 	
Weighted average number of Class A common shares outstanding - basic and diluted	 	23	 	 	 	 	 	 	 	
Earnings per Weighted Average Class A Common Share - Basic and Diluted	 	$	0.39	 	 	 	 	 	 	 	
 
6

 
NRG YIELD, INC.
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
(Unaudited)
 
 	 	Three months ended
September 30,	 	Nine months ended
September 30,	 	
 	 	2013	 	2012	 	2013	 	2012	 	
 	 	(In millions)	 	
Net Income	 	$	40	 	$	4	 	$	85	 	$	8	 	
Other Comprehensive (Loss)/Income, net of tax	 	 	 	 	 	 	 	 	 	
Unrealized (loss)/gain on derivatives, net of income tax expense/(benefit) of $1, ($2), $1 and ($7)	 	(3	)	16	 	16	 	9	 	
Other comprehensive (loss)/income	 	(3	)	16	 	16	 	9	 	
Comprehensive Income	 	37	 	$	20	 	101	 	$	17	 	
Less: Predecessor comprehensive income prior to initial public offering on July 22, 2013	 	9	 	 	 	73	 	 	 	
Comprehensive Income Subsequent to Initial Public Offering	 	28	 	 	 	$	28	 	 	 	
Less: Comprehensive income attributable to noncontrolling interest	 	20	 	 	 	 	 	 	 	
Comprehensive Income Attributed to NRG Yield Inc. Subsequent to Initial Public Offering	 	$	8	 	 	 	 	 	 	 	
 
7

 
NRG YIELD, INC.
 
CONSOLIDATED BALANCE SHEETS
 
(In millions)	 	September 30, 2013	 	December 31, 2012	 	
 	 	(unaudited)	 	 	 	
ASSETS	 	 	 	 	 	
Current Assets	 	 	 	 	 	
Cash and cash equivalents	 	$	121	 	$	22	 	
Restricted cash	 	91	 	20	 	
Accounts receivable — trade	 	54	 	22	 	
Due from NRG and subsidiaries	 	1	 	—	 	
Inventory	 	9	 	5	 	
Notes receivable	 	9	 	9	 	
Renewable energy grant receivable	 	101	 	—	 	
Deferred income taxes	 	4	 	1	 	
Prepayments and other current assets	 	18	 	2	 	
Total current assets	 	408	 	81	 	
Property, plant and equipment, net of accumulated depreciation of $149 and $115	 	1,487	 	1,598	 	
Other Assets	 	 	 	 	 	
Equity investments in affiliates	 	251	 	220	 	
Notes receivable	 	7	 	8	 	
Notes receivable — affiliate	 	2	 	6	 	
Intangible assets, net of accumulated amortization of $6 and $3	 	27	 	30	 	
Derivative instruments	 	7	 	—	 	
Deferred income taxes	 	116	 	—	 	
Other non-current assets	 	26	 	21	 	
Total other assets	 	436	 	285	 	
Total Assets	 	$	2,331	 	$	1,964	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	
Current Liabilities	 	 	 	 	 	
Current portion of long-term debt	 	$	147	 	$	58	 	
Accounts payable	 	26	 	166	 	
Due to NRG and subsidiaries	 	41	 	26	 	
Derivative instruments	 	23	 	19	 	
Accrued expenses and other current liabilities	 	30	 	16	 	
Total current liabilities	 	267	 	285	 	
Other Liabilities	 	 	 	 	 	
Long-term debt	 	1,020	 	723	 	
Long-term debt — affiliate	 	—	 	26	 	
Deferred income taxes	 	—	 	4	 	
Derivative instruments	 	25	 	61	 	
Other non-current liabilities	 	28	 	25	 	
Total non-current liabilities	 	1,073	 	839	 	
Total Liabilities	 	1,340	 	1,124	 	
Commitments and Contingencies	 	 	 	 	 	
Stockholders’ Equity	 	 	 	 	 	
Members’ equity	 	—	 	834	 	
Additional paid-in capital	 	571	 	—	 	
Retained earnings	 	9	 	30	 	
Accumulated other comprehensive loss	 	(2	)	(24	)	
Noncontrolling interest	 	413	 	—	 	
Total Stockholders’ Equity	 	991	 	840	 	
Total Liabilities and Stockholders’ Equity	 	$	2,331	 	$	1,964	 	
 
8

 
NRG YIELD, INC.
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
 	 	Nine months ended September 30,	 	
 	 	2013	 	2012	 	
 	 	(In millions)	 	
Cash Flows from Operating Activities	 	 	 	 	 	
Net income	 	$	85	 	$	8	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	
Distributions and equity in earnings of unconsolidated affiliates	 	(10	)	1	 	
Depreciation and amortization	 	35	 	18	 	
Amortization of financing costs and debt discount/premiums	 	1	 	—	 	
Amortization of intangibles and out-of-market contracts	 	2	 	1	 	
Changes in deferred income taxes	 	5	 	10	 	
Changes in derivative instruments	 	(14	)	3	 	
Changes in other working capital	 	(1	)	(21	)	
Net Cash Provided by Operating Activities	 	103	 	20	 	
Cash Flows from Investing Activities	 	 	 	 	 	
Capital expenditures	 	(232	)	(273	)	
Increase in restricted cash, net	 	(71	)	(2	)	
Decrease/(increase) in notes receivable	 	5	 	(12	)	
Proceeds from renewable energy grants	 	24	 	27	 	
Investments in unconsolidated affiliates	 	(19	)	(2	)	
Net Cash Used by Investing Activities	 	(293	)	(262	)	
Cash Flows from Financing Activities	 	 	 	 	 	
Capital contributions from NRG	 	150	 	279	 	
Dividends and returns of capital to NRG	 	(707	)	(32	)	
Proceeds from issuance of Class A common stock	 	468	 	—	 	
Proceeds from issuance of long-term debt — external	 	420	 	49	 	
Payment of debt issuance costs	 	(5	)	(11	)	
Payments for long-term debt — external	 	(35	)	(32	)	
Payments for long-term debt — affiliate	 	(2	)	(5	)	
Net Cash Provided by Financing Activities	 	289	 	248	 	
Net Increase in Cash and Cash Equivalents	 	99	 	6	 	
Cash and Cash Equivalents at Beginning of Period	 	22	 	24	 	
Cash and Cash Equivalents at End of Period	 	$	121	 	$	30	 	
 
9

 
Appendix Table A-1: Third Quarter 2013 Segment Adjusted EBITDA Reconciliation
 
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
($ in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	24	 	16	 	6	 	(6	)	40	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	5	 	5	 	
Interest Expense, net	 	4	 	7	 	2	 	—	 	13	 	
Depreciation and Amortization	 	6	 	6	 	4	 	—	 	16	 	
Contract Amortization	 	—	 	—	 	1	 	—	 	1	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	2	 	6	 	—	 	—	 	8	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	36	 	35	 	13	 	(1	)	83	 	
 
Appendix Table A-2: Third Quarter 2012 Segment Adjusted EBITDA Reconciliation
 
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
($ in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	3	 	3	 	8	 	(10	)	4	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	8	 	8	 	
Interest Expense, net	 	—	 	3	 	2	 	—	 	5	 	
Depreciation and Amortization	 	—	 	3	 	3	 	—	 	6	 	
Contract Amortization	 	—	 	—	 	1	 	—	 	1	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	4	 	1	 	—	 	—	 	5	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	7	 	10	 	14	 	(2	)	29	 	
 
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Appendix Table A-3: YTD September 30, 2013 Segment Adjusted EBITDA Reconciliation
 
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
($ in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	43	 	37	 	15	 	(10	)	85	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	5	 	5	 	
Interest Expense, net	 	8	 	10	 	6	 	—	 	24	 	
Depreciation and Amortization	 	8	 	16	 	11	 	—	 	35	 	
Contract Amortization	 	—	 	—	 	1	 	—	 	1	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	11	 	17	 	—	 	—	 	28	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	70	 	80	 	33	 	(5	)	178	 	
 
Appendix Table A-4: YTD September 30, 2012 Segment Adjusted EBITDA Reconciliation
 
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to net income/ (loss):
 
($ in millions)	 	Conventional	 	Renewable	 	Thermal	 	Corporate	 	Total	 	
Net Income/(Loss)	 	11	 	(2	)	15	 	(16	)	8	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax	 	—	 	—	 	—	 	10	 	10	 	
Interest Expense, net	 	—	 	19	 	6	 	—	 	25	 	
Depreciation and Amortization	 	—	 	7	 	11	 	—	 	18	 	
Contract Amortization	 	—	 	—	 	1	 	—	 	1	 	
Adjustments to reflect Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	12	 	5	 	—	 	—	 	17	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	23	 	29	 	33	 	(6	)	79	 	
 
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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	 	Nine Months Ended	 	
($ in millions)	 	9/30/13	 	9/30/12	 	9/30/13	 	9/30/12	 	
Adjusted EBITDA	 	83	 	29	 	178	 	79	 	
Pro-rata Adjusted EBITDA from unconsolidated affiliates	 	(20	)	(11	)	(46	)	(32	)	
Cash distributions from unconsolidated affiliates	 	1	 	6	 	10	 	18	 	
Cash interest paid	 	(11	)	(7	)	(30	)	(16	)	
Maintenance Capital expenditures	 	(1	)	—	 	(5	)	(3	)	
Change in other assets	 	14	 	—	 	9	 	—	 	
Principal amortization of indebtedness	 	(10	)	(5	)	(33	)	(20	)	
Cash Available for Distribution	 	56	 	12	 	83	 	26	 	
 
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	 	
($ in millions)	 	12/31/13	 	12/31/14	 	
Net Income	 	99	 	58	 	
Adjustments to net income to arrive at Adjusted EBITDA:	 	 	 	 	 	
Depreciation and amortization	 	50	 	66	 	
Interest expense, net	 	41	 	66	 	
Contract amortization	 	1	 	1	 	
Income tax expense	 	17	 	41	 	
Adjustment to reflect pro-rata Adjusted EBITDA from unconsolidated affiliates	 	32	 	53	 	
Adjusted EBITDA	 	240	 	285	 	
 
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;
 
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·                 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 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.
 
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