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): February 29, 2016
 
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 February 29, 2016, NRG Yield, Inc. issued a press release announcing its financial results for the year ended December 31, 2015.  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 February 29, 2016	
 
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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/ Brian E. Curci	
 	 	Brian E. Curci	
 	 	Corporate Secretary	

Dated: February 29, 2016	 	
 
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Exhibit Index
 
Exhibit
Number	 	Document	
 	 	 	
99.1	 	Press Release, dated February 29, 2016	
 
4

Exhibit 99.1

 
NRG Yield, Inc. Reports Full Year and
Fourth Quarter 2015 Financial Results
 
2015 Financial Highlights
·                  $720 million of Adjusted EBITDA for full year 2015
·                  $179 million of Cash Available for Distribution (CAFD) for full year 2015
·                  $0.215 per share quarterly dividend paid to Class A and Class C common stock holders ($0.86 per share annualized) on December 15, 2015 representing a 15% year over year increase since the fourth quarter 2014
·                  Raised total net proceeds of over $1 billion in third party financing through the issuance of Class C common stock, convertible notes and tax equity; the proceeds were used to fund acquisitions, repay project level indebtedness and for general corporate purposes
 
Increasing Dividend
·                  On February 17, 2016, announced a 4.65% quarter over quarter increase in the Class A and Class C common stock dividend payable in first quarter of 2016 to $0.225 per share ($0.90 per share annualized)
·                  Reaffirming the target of $0.25 per share quarterly dividend ($1.00 per share annualized) by the fourth quarter 2016, a 16% year over year increase and a 67% increase since our first post-IPO dividend in the fourth quarter 2013
 
Business Highlights
·                  In 2015, NRG Yield increased the size of its contracted generation portfolio by approximately 1.6 GW and approximately $80 million in annual CAFD through the execution of both drop down transactions with NRG Energy and third party acquisitions
·                  In May 2015, and concurrent with the recapitalization of the Company through the creation of the new Class C common stock, NRG Yield and NRG Energy agreed to an expanded ROFO agreement for approximately 800 MW of new long term contracted natural gas assets, 900 MWs of wind assets(1), and $250 million commitment in residential and business renewable solar portfolios
·                  Announcing a $50 million reallocation in NRG Yield’s previously committed investment partnerships with NRG Energy from residential solar to business renewables to more closely align with NRG’s strategic priorities
 
Reaffirming 2016 Guidance
·                  Full year 2016 guidance:
·                  Adjusted EBITDA of $805 million
·                  CAFD of $265 million
 
PRINCETON, NJ — February 29, 2016 — NRG Yield, Inc. (NYSE: NYLD, NYLD.A) today reported fourth quarter 2015 financial results including Adjusted EBITDA of $183 million and CAFD of $15 million, which resulted in full year Adjusted EBITDA and CAFD for 2015 of $720 million and $179 million, respectively. Net income attributable to Class A and Class C stockholders for the twelve months ended December 31, 2015 was $33 million or $0.40 per Class A and Class C common share.

(1)   Includes the Nov. 3, 2015 Drop Down of 611 net MW
 
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“NRG Yield ended the year strong, delivering on our financial commitments while maintaining a robust growth pipeline through our strategic relationship with NRG,” said Mauricio Gutierrez, NRG Yield’s Interim Chief Executive Officer. “While the capital markets continue to be quite turbulent, we remain focused on executing across our portfolio. Furthermore, we believe NRG Yield continues to represent a unique investment opportunity, both with its predictable and growing dividend as well as its ability to participate in the sector’s secular growth trends.”
 
Overview of Financial and Operating Results
 
Note 1: In accordance with GAAP, 2014 results have been recast to include the Drop Down Assets acquired by NRG Yield from NRG on June 30, 2014 (June 2014 Drop Down Assets), January 2, 2015 (January 2015 Drop Down Assets), and November 3, 2015(2) (November 2015 Drop Down Assets) as if the combinations have been in effect since the inception of common control.
 
Table 1: Selected Financial Results
 
 	 	Three Months Ended	 	Twelve Months Ended	 	
($ in millions)	 	12/31/15	 	12/31/14	 	12/31/15	 	12/31/14	 	
Operating Revenue	 	$	209	 	$	212	 	$	869	 	$	746	 	
Net Income	 	13	 	4	 	55	 	99	 	
Adjusted EBITDA	 	183	 	159	 	720	 	582	 	
Cash Available for Distribution	 	15	 	12	 	179	 	155	 	

Segment Results
 
Table 2: Adjusted EBITDA
 
($ in millions)	 	Three Months Ended	 	Twelve Months Ended	 	
Segment	 	12/31/15	 	12/31/14	 	12/31/15	 	12/31/14	 	
Conventional	 	$	90	 	$	79	 	$	313	 	$	293	 	
Renewable	 	85	 	73	 	368	 	238	 	
Thermal	 	10	 	8	 	51	 	58	 	
Corporate	 	(2	)	(1	)	(12	)	(7	)	
Adjusted EBITDA	 	$	183	 	$	159	 	$	720	 	$	582	 	
 
Table 3: Net Income/(Loss)
 
($ in millions)	 	Three Months Ended	 	Twelve Months Ended	 	
Segment	 	12/31/15	 	12/31/14	 	12/31/15	 	12/31/14	 	
Conventional	 	$	53	 	$	48	 	$	156	 	$	141	 	
Renewable	 	(17	)	(42	)	(35	)	(28	)	
Thermal	 	2	 	3	 	22	 	31	 	
Corporate	 	(25	)	(5	)	(88	)	(45	)	
Net Income	 	$	13	 	$	4	 	$	55	 	$	99	 	
 
For the fourth quarter, NRG Yield reported Net Income of $13 million, Adjusted EBITDA of $183 million, and CAFD of $15 million. Fourth quarter CAFD outperformed guidance driven by favorable wind production at the Alta wind farm in California, a one-time receipt of

(2)   November 3, 2015 Drop Down consisted of 75% interest in a portfolio of twelve wind facilities
 
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insurance proceeds related to the Q1 2015 El Segundo forced outage, and a $3 million timing delay of debt service payments subsequently paid in January 2016.
 
For the year ended December 31, 2015, NRG Yield reported Net Income of $55 million, Adjusted EBITDA of $720 million, and CAFD of $179 million. Full year Adjusted EBITDA was higher than 2014 primarily due to the full year impact of Alta Wind and Walnut Creek, as well as the acquisitions of Desert Sunlight and Spring Canyon. Full year CAFD was higher than 2014 primarily due to the full year impact of the June 2014 Drop Down Assets, the acquisition of the January 2015 Drop Down Assets, and the acquisition of Desert Sunlight. Fourth quarter Adjusted EBITDA and CAFD was higher than the same period in 2014 primarily as a result of the acquisition of Desert Sunlight.
 
Operational Performance
 
Table 4: Selected Operating Results
 
 	 	Three Months Ended	 	Twelve Months Ended	 	
(MWh and MWht in thousands)	 	12/31/15	 	12/31/14	 	12/31/15	 	12/31/14	 	
Equivalent Availability Factor (Conventional)	 	98.8	%	98.0	%	94.3	%	95.8	%	
Renewable Generation Sold (MWh)	 	1,480	 	1,403	 	5,740	 	3,977	 	
Thermal Generation Sold (MWht)(1)	 	505	 	500	 	2,243	 	2,265	 	

(1)   Also includes Thermal MWh sold
 
For the fourth quarter 2015, NRG Yield maintained strong safety performance with a 0.49 incident rate. Generation in the renewable segment was 5% higher in the fourth quarter versus the same period in 2014 as a result of the Spring Canyon acquisition in May 2015.
 
Liquidity and Capital Resources
 
Table 5: Liquidity
 
($ in millions)	 	12/31/15	 	12/31/14	 	
Cash and Cash Equivalents	 	$	111	 	$	429	 	
Restricted Cash	 	48	 	47	 	
Total Cash	 	$	159	 	$	476	 	
Revolver Availability	 	133	 	412	 	
Total Liquidity	 	$	292	 	$	888	 	
 
Total liquidity as of December 31, 2015 was $292 million, a decrease of $596 million from December 31, 2014. This reflects a decrease in revolver availability of $279 million and a decrease in cash of $317 million primarily used to fund the acquisitions of the January 2015 and November 2015 Drop Down Assets.(3)
 
Summary of 2015 Acquisitions
 
January 2015 Drop Down Assets:
·                  Walnut Creek — 485 MW natural gas facility located in City of Industry, CA
·                  Tapestry — Three wind facilities totaling 204 MW: including Buffalo Bear, 19 MW in Buffalo, OK; Taloga, 130 MW in Putnam, OK; and Pinnacle, 55 MW in Keyser, WV
·                  Laredo Ridge — 80 MW wind facility located in Petersburg, NE
 
April 2015:
·                  University of Bridgeport Fuel Cell - 1.4 MW of thermal capacity located in Bridgeport, CT

(3)   See Appendix A-6 for Twelve Months Ended 2015 Sources and Uses of Cash and Cash Equivalents detail
 
3

 
·                  Entered into partnership with NRG Energy to invest in residential solar leases owned and developed by NRG Energy; subsequently amended in February 2016
 
May 2015:
·                  Spring Canyon — 90.1% interest in two wind facilities representing 54 net MW located in Logan Country, CO
·                  Entered into partnership with NRG Energy to invest in business renewable assets owned and operated by NRG; subsequently amended in February 2016
 
June 2015:
·                  Desert Sunlight — 25% interest in two utility-scale solar facilities representing 138 net MW located in Desert Center, CA
 
November 2015 Drop Down Assets:
A 75% interest in an 814 net MW portfolio of twelve wind facilities, representing 611 net MW. The wind assets included in the portfolio are:
·                  Elkhorn Ridge — 54 MW wind facility located in Bloomfield, NE
·                  San Juan Mesa — 90 MW wind facility located in Elida, NM
·                  Wildorado — 161 MW wind facility located in Vega, TX
·                  Crosswinds — 21 MW wind facility located in Ayrshire, IA
·                  Forward — 29 MW wind facility located in Berlin, PA
·                  Hardin — 15 MW wind facility located in Jefferson, IA
·                  Odin — 20 MW wind facility located in Odin, MN
·                  Sleeping Bear — 95 MW wind facility located in Woodward, OK
·                  Spanish Fork — 19 MW wind facility located in Spanish Fork, UT
·                  Lookout — 38 MW wind facility located in Berlin, PA
·                  Goat Wind — 150 MW wind facility located in Sterling City, TX
·                  Elbow Creek — 122 MW wind facility located in Howard County, TX
 
Reallocation of Investment Opportunity
 
On February 29, 2016, the Company amended its agreements with NRG in order to reallocate $50 million in existing capital commitments from residential solar to business renewables. The amendments reduce the total committed capital under the residential solar partnership from $150 million to $100 million, and create a new business renewables partnership with a total commitment of $50 million, bringing the aggregate commitments under the business renewables partnerships with NRG from $100 million to $150 million. This reallocation emphasizes continuation of the strategically symbiotic relationship between the two companies and realigns the Company’s investment priorities with NRG’s strategic growth objectives.
 
Quarterly Dividend Updates
 
On February 17, 2016, the Company’s Board of Directors declared a quarterly dividend on Class A and Class C common stock of $0.225 per share ($0.90 per share annualized)  payable on March 15, 2016 to shareholders of record as of March 1, 2016. This equates to a 4.65% increase over the prior quarter and an increase of 15% over the past year.
 
Seasonality
 
NRG Yield’s quarterly operating results are impacted by seasonal factors. The majority of NRG Yield’s revenues are generated from 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:
 
4

 
·                  Higher summer capacity prices from conventional assets;
·                  Higher solar insolation during the summer months;
·                  Higher wind resources during the spring months;
·                  Debt service payments which are made either quarterly or semi-annually; and
·                  Timing of maintenance capital expenditures
 
The Company takes into consideration the timing of these factors to ensure sufficient funds are available for distribution on a quarterly basis.
 
Financial Guidance
 
NRG Yield is reaffirming full year guidance of $805 million Adjusted EBITDA and $265 million CAFD, although actual results may vary depending on the operating performance of the assets. Additionally, and given the seasonality described above, the Company is transitioning from disclosing specific quarterly guidance to providing expected percentage ranges related to the achievement of our full year Adjusted EBITDA and CAFD on a quarterly basis based on the portfolio owned by the Company at the present time. The first such disclosure for 2016 is provided below:
 
Table 6: Estimated Quarterly Adjusted EBITDA and CAFD Ranges(4)
 
 	 	1st Quarter	 	2nd Quarter	 	3rd Quarter	 	4th Quarter	 	
Adjusted EBITDA	 	21-22%	 	29-31%	 	25-27%	 	22-23%	 	
Cash Available for Distribution	 	13-17%	 	21-28%	 	48-52%	 	8-13%	 	
 
Finally, the Company is targeting a quarterly dividend of $0.25 per share ($1.00 per share annualized) on each of the Company’s Class A and Class C common stock by the 4 th  quarter of 2016. This would represent a 16% year over year increase since the fourth quarter of 2015.
 
Earnings Conference Call
On February 29, 2016, NRG Yield will host a conference call at 9:00 a.m. 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 “Presentations & Webcasts.”
 
About NRG Yield
NRG Yield owns a diversified portfolio of contracted renewable and conventional generation and thermal infrastructure assets in the United States, including fossil fuel, solar and wind  power generation facilities that provide the capacity to support more than two 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 multiple locations. NRG Yield’s Class C and Class A common stock are traded on the New York Stock Exchange under the symbols NYLD and NYLD.A, respectively. 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

(4)         Percent ranges in table are primarily driven by potential variability in both wind and solar production; Renewable resources may experience deviation beyond +/-5%;  Other items which may impact CAFD include non-recurring events such as forced outages or timing of maintenance capex
 
5

 
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 be correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated herein 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, 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 execute acquisitions, our ability to enter into new contracts as existing contracts expire, our ability to acquire assets from NRG Energy, Inc. or third parties,  our ability to maintain or create successful partnering relationships with NRG Energy and other third parties, our ability to close drop-down transactions, 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, February 29, 2016, and are based on assumptions the company believed to be reasonable as of that 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	Kevin Cole, CFA	
 	609.524.4608	609.524.4526	
 	 	 	
 	Marijke Shugrue	Lindsey Puchyr	
 	609.524.5262	609.524.4527	
 
6

 
NRG YIELD, INC.
 
CONSOLIDATED STATEMENTS OF INCOME
 
 	 	Year ended December 31,	 	
(In millions, except per share amounts)	 	2015	 	2014 (a)	 	2013 (a)	 	
Operating Revenues	 	 	 	 	 	 	 	
Total operating revenues	 	$	869	 	$	746	 	$	387	 	
Operating Costs and Expenses	 	 	 	 	 	 	 	
Cost of operations	 	312	 	266	 	148	 	
Depreciation and amortization	 	265	 	202	 	74	 	
General and administrative	 	12	 	8	 	7	 	
Acquisition-related transaction and integration costs	 	3	 	4	 	—	 	
Total operating costs and expenses	 	592	 	480	 	229	 	
Operating Income	 	277	 	266	 	158	 	
Other Income (Expense)	 	 	 	 	 	 	 	
Equity in earnings of unconsolidated affiliates	 	35	 	25	 	22	 	
Other income, net	 	2	 	3	 	3	 	
Loss on extinguishment of debt	 	(9	)	—	 	—	 	
Interest expense	 	(238	)	(191	)	(52	)	
Total other expense, net	 	(210	)	(163	)	(27	)	
Income Before Income Taxes	 	67	 	103	 	131	 	
Income tax expense	 	12	 	4	 	8	 	
Net Income	 	$	55	 	$	99	 	$	123	 	
Less: Pre-acquisition net (loss) income of Drop Down Assets	 	(20	)	35	 	14	 	
Net Income Excluding Pre-acquisition Net (Loss) Income of Drop Down Assets	 	75	 	64	 	109	 	
Less: Predecessor income prior to initial public offering on July 22, 2013	 	—	 	—	 	54	 	
Less: Net income attributable to noncontrolling interests	 	42	 	48	 	42	 	
Net Income Attributable to NRG Yield, Inc.	 	$	33	 	$	16	 	$	13	 	
Earnings Per Share Attributable to NRG Yield, Inc. Class A and Class C Common Stockholders	 	 	 	 	 	 	 	
Weighted average number of Class A common shares outstanding - basic and diluted	 	35	 	28	 	23	 	
Weighted average number of Class C common shares outstanding - basic and diluted	 	49	 	28	 	23	 	
Earnings per Weighted Average Class A and Class C Common Share - Basic and Diluted	 	$	0.40	 	$	0.30	 	$	0.29	 	
Dividends Per Class A Common Share	 	$	1.015	 	$	1.42	 	$	0.23	 	
Dividends Per Class C Common Share	 	$	0.625	 	N/A	 	N/A	 	

(a)  Retrospectively adjusted as discussed in Note 1, Nature of Business.
 
See accompanying notes to consolidated financial statements.
 
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NRG YIELD, INC.
 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
 	 	Year ended December 31,	 	
 	 	2015	 	2014 (a)	 	2013 (a)	 	
 	 	(In millions)	 	
Net Income	 	$	55	 	$	99	 	$	123	 	
Other Comprehensive (Loss) Income, net of tax	 	 	 	 	 	 	 	
Unrealized (loss) gain on derivatives, net of income tax benefit (expense) of $10, $5, and ($16)	 	(8	)	(61	)	48	 	
Other comprehensive (loss) income	 	(8	)	(61	)	48	 	
Comprehensive Income	 	47	 	38	 	$	171	 	
Less: Predecessor comprehensive income prior to initial public offering on July 22, 2013	 	—	 	—	 	73	 	
Less: Pre-acquisition net (loss) income of Drop Down Assets	 	(20	)	35	 	$	14	 	
Less: Comprehensive income (loss) attributable to noncontrolling interests	 	52	 	(4	)	69	 	
Comprehensive Income Attributable to NRG Yield Inc.	 	$	15	 	$	7	 	$	15	 	

(a)  Retrospectively adjusted as discussed in Note 1, Nature of Business.
 
See accompanying notes to consolidated financial statements.
 
8

 
NRG YIELD, INC.
 
CONSOLIDATED BALANCE SHEETS
 
 	 	December 31, 2015	 	December 31, 2014 (a)	 	
 	 	(In millions)	 	
ASSETS	 	 	 	 	 	
Current Assets	 	 	 	 	 	
Cash and cash equivalents	 	$	111	 	$	429	 	
Restricted cash	 	48	 	47	 	
Accounts receivable — trade	 	95	 	90	 	
Accounts receivable — affiliate	 	—	 	28	 	
Inventory	 	35	 	32	 	
Derivative instruments — affiliate	 	—	 	2	 	
Notes receivable	 	7	 	6	 	
Prepayments and other current assets	 	22	 	22	 	
Total current assets	 	318	 	656	 	
Property, plant and equipment	 	 	 	 	 	
In service	 	5,748	 	5,604	 	
Under construction	 	9	 	9	 	
Total property, plant and equipment	 	5,757	 	5,613	 	
Less accumulated depreciation	 	(701	)	(438	)	
Net property, plant and equipment	 	5,056	 	5,175	 	
Other Assets	 	 	 	 	 	
Equity investments in affiliates	 	798	 	410	 	
Notes receivable	 	10	 	15	 	
Intangible assets, net of accumulated amortization of $93 and $38	 	1,362	 	1,424	 	
Derivative instruments	 	—	 	2	 	
Deferred income taxes	 	170	 	134	 	
Other non-current assets	 	61	 	44	 	
Total other assets	 	2,401	 	2,029	 	
Total Assets	 	$	7,775	 	$	7,860	 	

(a)  Retrospectively adjusted as discussed in Note 1, Nature of Business.
 
See accompanying notes to consolidated financial statements.
 
9

 
 
NRG YIELD, INC.
 
CONSOLIDATED BALANCE SHEETS (Continued)
 
 	 	December 31, 2015	 	December 31, 2014 (a)	 	
 	 	(In millions, except share information)	 	
LIABILITIES AND STOCKHOLDERS’ EQUITY	 	 	 	 	 	
Current Liabilities	 	 	 	 	 	
Current portion of long-term debt	 	$	241	 	$	224	 	
Accounts payable	 	23	 	22	 	
Accounts payable — affiliate	 	85	 	46	 	
Derivative instruments	 	39	 	52	 	
Accrued expenses and other current liabilities	 	68	 	65	 	
Total current liabilities	 	456	 	409	 	
Other Liabilities	 	 	 	 	 	
Long-term debt	 	4,562	 	4,697	 	
Derivative instruments	 	61	 	77	 	
Other non-current liabilities	 	64	 	52	 	
Total non-current liabilities	 	4,687	 	4,826	 	
Total Liabilities	 	5,143	 	5,235	 	
Commitments and Contingencies	 	 	 	 	 	
Stockholders’ Equity	 	 	 	 	 	
Preferred stock, $0.01 par value; 10,000,000 shares authorized; none issued	 	—	 	—	 	
Class A, Class B, Class C and Class D common stock, $0.01 par value; 3,000,000,000 shares authorized (Class A 500,000,000, Class B 500,000,000, Class C 1,000,000,000, Class D 1,000,000,000); 182,848,000 shares issued and outstanding (Class A 34,586,250, Class B 42,738,750, Class C 62,784,250, Class D 42,738,750) at December 31, 2015 and 154,650,000 shares issued and outstanding (Class A 34,586,250, Class B 42,738,750, Class C 34,586,250, Class D 42,738,750) at December 31, 2014	 	1	 	—	 	
Additional paid-in capital	 	1,855	 	1,240	 	
Retained earnings	 	12	 	3	 	
Accumulated other comprehensive loss	 	(27	)	(9	)	
Noncontrolling interest	 	791	 	1,391	 	
Total Stockholders’ Equity	 	2,632	 	2,625	 	
Total Liabilities and Stockholders’ Equity	 	$	7,775	 	$	7,860	 	

(a)  Retrospectively adjusted as discussed in Note 1, Nature of Business.
 
See accompanying notes to consolidated financial statements.
 
10

 
NRG YIELD, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 	 	Year ended December 31,	 	
 	 	2015	 	2014 (a)	 	2013 (a)	 	
 	 	(In millions)	 	
Cash Flows from Operating Activities	 	 	 	 	 	 	 	
Net income	 	$	55	 	$	99	 	$	123	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	
Distributions in excess of equity in earnings of unconsolidated affiliates	 	29	 	5	 	(6	)	
Depreciation and amortization	 	265	 	202	 	74	 	
Amortization of financing costs and debt discount/premiums	 	16	 	10	 	4	 	
Amortization of intangibles and out-of-market contracts	 	54	 	28	 	1	 	
Adjustment for debt extinguishment	 	9	 	—	 	—	 	
Change in deferred income taxes	 	12	 	4	 	8	 	
Changes in derivative instruments	 	(45	)	(14	)	(21	)	
Changes in other working capital	 	(22	)	(24	)	(63	)	
Net Cash Provided by Operating Activities	 	373	 	310	 	120	 	
Cash Flows from Investing Activities	 	 	 	 	 	 	 	
Acquisition of businesses, net of cash acquired	 	(37	)	(901	)	(120	)	
Acquisition of Drop Down Assets, net of cash acquired	 	(698	)	(311	)	—	 	
Capital expenditures	 	(29	)	(33	)	(353	)	
(Increase) decrease in restricted cash	 	(1	)	49	 	(43	)	
Decrease in notes receivable, including affiliates	 	7	 	8	 	10	 	
Proceeds from renewable energy grants	 	—	 	137	 	25	 	
Net investments in unconsolidated affiliates	 	(360	)	7	 	(34	)	
Other	 	—	 	11	 	—	 	
Net Cash Used in Investing Activities	 	(1,118	)	(1,033	)	(515	)	
Cash Flows from Financing Activities	 	 	 	 	 	 	 	
Contributions from noncontrolling interests	 	122	 	190	 	—	 	
Capital contributions from NRG	 	—	 	2	 	171	 	
Distributions and return of capital to NRG prior to the acquisition of Drop Down Assets and IPO	 	(38	)	(290	)	(707	)	
Proceeds from the issuance of common stock	 	599	 	630	 	468	 	
Payment of dividends and distributions	 	(139	)	(101	)	(15	)	
Proceeds from issuance of long-term debt	 	844	 	975	 	594	 	
Payment of debt issuance costs	 	(13	)	(36	)	(5	)	
Payments for long-term debt — external	 	(948	)	(277	)	(72	)	
Payments for long-term debt — affiliate	 	—	 	—	 	(2	)	
Net Cash Provided by Financing Activities	 	427	 	1,093	 	432	 	
Net (Decrease) Increase in Cash and Cash Equivalents	 	(318	)	370	 	37	 	
Cash and Cash Equivalents at Beginning of Period	 	429	 	59	 	22	 	
Cash and Cash Equivalents at End of Period	 	$	111	 	$	429	 	$	59	 	

(a)  Retrospectively adjusted as discussed in Note 1, Nature of Business.
 
See accompanying notes to consolidated financial statements.
 
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Appendix Table A-1: Fourth Quarter 2015 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)	 	53	 	(17	)	2	 	(25	)	13	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax Expense	 	—	 	—	 	—	 	4	 	4	 	
Interest Expense, net	 	12	 	24	 	2	 	18	 	56	 	
Depreciation, Amortization, and ARO Expense	 	20	 	42	 	5	 	—	 	67	 	
Contract Amortization	 	2	 	12	 	—	 	—	 	14	 	
Asset Write Offs	 	—	 	1	 	1	 	—	 	2	 	
Merger and Transaction Costs	 	—	 	—	 	—	 	1	 	1	 	
Mark to Market (MtM) Losses on economic hedges	 	—	 	3	 	—	 	—	 	3	 	
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	3	 	20	 	—	 	—	 	23	 	
Adjusted EBITDA	 	90	 	85	 	10	 	(2	)	183	 	
 
Appendix Table A-2: Fourth Quarter 2014 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)	 	48	 	(42	)	3	 	(5	)	4	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax Expense	 	—	 	—	 	—	 	(11	)	(11	)	
Interest Expense, net	 	13	 	50	 	1	 	13	 	77	 	
Depreciation, Amortization, and ARO Expense	 	21	 	40	 	4	 	—	 	65	 	
Contract Amortization	 	(6	)	14	 	—	 	—	 	8	 	
Merger and Transaction Costs	 	—	 	—	 	—	 	2	 	2	 	
Mark to Market (MtM) (Gains) on economic hedges	 	—	 	(2	)	—	 	—	 	(2	)	
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	3	 	13	 	—	 	—	 	16	 	
Adjusted EBITDA	 	79	 	73	 	8	 	(1	)	159	 	
 
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Appendix Table A-3: YTD December 31, 2015 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)	 	156	 	(35	)	22	 	(88	)	55	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax Expense	 	—	 	—	 	—	 	12	 	12	 	
Interest Expense, net	 	48	 	122	 	7	 	61	 	238	 	
Depreciation, Amortization, and ARO Expense	 	82	 	166	 	19	 	—	 	267	 	
Contract Amortization	 	6	 	46	 	2	 	—	 	54	 	
Loss on Debt Extinguishment	 	7	 	2	 	—	 	—	 	9	 	
Asset Write Offs	 	—	 	2	 	1	 	—	 	3	 	
Merger and Transaction Costs	 	—	 	—	 	—	 	3	 	3	 	
Mark to Market (MtM) Losses on economic hedges	 	—	 	2	 	—	 	—	 	2	 	
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	14	 	63	 	—	 	—	 	77	 	
Adjusted EBITDA	 	313	 	368	 	51	 	(12	)	720	 	
 
Appendix Table A-4: YTD December 31, 2014 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)	 	141	 	(28	)	31	 	(45	)	99	 	
Plus:	 	 	 	 	 	 	 	 	 	 	 	
Income Tax Expense	 	—	 	—	 	—	 	4	 	4	 	
Interest Expense, net	 	52	 	100	 	7	 	30	 	189	 	
Depreciation, Amortization, and ARO Expense	 	82	 	104	 	18	 	—	 	204	 	
Contract Amortization	 	4	 	23	 	2	 	—	 	29	 	
Merger and Transaction Costs	 	—	 	—	 	—	 	4	 	4	 	
Mark to Market (MtM) (Gains) on economic hedges	 	—	 	(2	)	—	 	—	 	(2	)	
Adjustments to reflect NRG Yield’s pro-rata share of Adjusted EBITDA from Unconsolidated Affiliates	 	14	 	41	 	—	 	—	 	55	 	
Adjusted EBITDA	 	293	 	238	 	58	 	(7	)	582	 	
 
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Appendix Table 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	 	Twelve Months Ended	 	
($ in millions)	 	12/31/15	 	12/31/14	 	12/31/15	 	12/31/14	 	
Adjusted EBITDA	 	183	 	159	 	720	 	582	 	
Pro-rata Adjusted EBITDA from unconsolidated affiliates	 	(30	)	(16	)	(112	)	(80	)	
Cash distributions from unconsolidated affiliates	 	14	 	4	 	91	 	47	 	
Cash distributions to non-controlling interest prior to Drop Down (NRG)	 	(4	)	2	 	(26	)	(41	)	
Cash interest paid	 	(70	)	(68	)	(251	)	(175	)	
Maintenance Capital expenditures	 	(11	)	(3	)	(20	)	(8	)	
Change in other assets	 	(12	)	(12	)	(12	)	—	 	
Principal amortization of indebtedness	 	(55	)	(54	)	(211	)	(170	)	
Cash Available for Distribution	 	15	 	12	 	179	 	155	 	
 
Appendix Table A-6: Full Year 2015 Sources and Uses of Liquidity
The following table summarizes the sources and uses of liquidity in the twelve months of 2015.
 
($ in millions)	 	Twelve months ended
December 31, 2015	 	
Sources:	 	 	 	
Proceeds from Issuance of Class C Shares, net of expenses	 	$	599	 	
Net cash Provided by Operating Activities	 	373	 	
Proceeds from Revolver, net of payments	 	306	 	
Proceeds from Convertible Debt, net of expenses	 	281	 	
Proceeds from Alta X/XI Tax Equity, net of expenses	 	119	 	
Uses:	 	 	 	
Acquisition of Businesses, net of cash acquired	 	735	 	
Payments for Alta X/XI Long-Term Debt	 	491	 	
Net Investments in unconsolidated affiliates	 	360	 	
Payments for Long-Term Debt	 	211	 	
Dividends and Distributions to NRG Yield’s Shareholders and NRG Energy	 	139	 	
Net Other Cash Outflows	 	31	 	
Capital Expenditures	 	29	 	
 	 	 	 	
Change in Cash and Cash Equivalents	 	$	(318	)	
 
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Appendix Table A-7: Adjusted EBITDA and Cash Available for Distribution Guidance(5)
 
($ in millions)	 	2016 Full Year	 	
Income before Income Taxes	 	275	 	
Interest Expense, net	 	270	 	
Depreciation, Amortization, Contract Amortization, and ARO Expense	 	260	 	
Adjusted EBITDA	 	$	805	 	
Pro-rata Adjusted EBITDA from unconsolidated affiliates	 	(122	)	
Cash distributions from unconsolidated affiliates, net of tax equity proceeds	 	101	 	
Cash distributions to non-controlling interest	 	(13	)	
Cash interest paid	 	(235	)	
Maintenance capital expenditures	 	(25	)	
Change in other assets	 	(8	)	
Principal amortization of indebtedness	 	(238	)	
Estimated Cash Available for Distribution	 	$	265	 	

(5)  Guidance excludes the impact of interest on cash drawn on NRG Yield’s revolving credit facility as of February 29th, 2016 which equates to $9 million on an annualized basis, subject to change
 
Appendix Table A-8: Adjusted EBITDA and Cash Available for Distribution from Acquisitions
 
($ in millions)	 	January 2nd
 2015 Drop
 Down	 	Spring
 Canyon/Fuel
 Cell	 	Desert
 Sunlight
 Run-Rate	 	75%
 interest of
 NRG Wind
 TE Holdco
 Drop Down
 Run-Rate(6),(7)	 	Total	 	
Income before Income Taxes	 	3	 	(1	)	13	 	(9	)	6	 	
Interest Expense, net	 	36	 	—	 	—	 	10	 	46	 	
Depreciation, Amortization, Contract Amortization, and ARO Expense	 	81	 	4	 	—	 	45	 	130	 	
Adjustment to reflect NRG share of Adjusted EBITDA in unconsolidated affiliates	 	—	 	—	 	32	 	1	 	33	 	
Adjusted EBITDA	 	120	 	3	 	45	 	47	 	215	 	
Pro-rata Adjusted EBITDA from unconsolidated affiliates	 	—	 	 	 	(45	)	(10	)	(55	)	
Cash distributions from unconsolidated affiliates, net of tax equity proceeds	 	—	 	—	 	22	 	19	 	41	 	
Cash distributions to non-controlling interest	 	—	 	—	 	—	 	(7	)	(7	)	
Cash interest paid	 	(33	)	—	 	—	 	(11	)	(44	)	
Maintenance capital expenditures	 	—	 	—	 	—	 	(1	)	(1	)	
Change in other assets	 	1	 	—	 	—	 	—	 	1	 	
Principal amortization of indebtedness	 	(53	)	—	 	—	 	(17	)	(70	)	
Estimated Cash Available for Distribution	 	35	 	3	 	22	 	20	 	80	 	
 
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

(6)  Represents average run-rate CAFD calculated over the internally assumed useful life of the assets
 
(7)  75% interest in 814 net MW of wind assets primarily acquired by NRG in the EME transaction, Adjusted EBITDA is consolidated on NRG Yield, 75% pro-rata Adjusted EBITDA is approximately $35MM
 
15

 
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 (CAFD) is adjusted EBITDA plus cash dividends from unconsolidated affiliates, less cash distributions to noncontrolling interests, 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.
 
16