Exhibit 99.1
FOR FURTHER INFORMATION: | Dennis Barber, investors | (713) 497-3042 | ||
Pat Hammond, media | (713) 497-7723 | |||
FOR IMMEDIATE RELEASE: | May 1, 2008 |
Reliant Energy Reports First Quarter 2008 Results
• | Continued improvement in financial results |
• | Committed to deliver top quartile operating performance |
• | Accelerated investment in Smart Energy |
• | Entered New York market for sales to commercial and industrial customers |
• | Announced sale of Bighorn generating facility for $500 million |
HOUSTON —Reliant Energy, Inc. reported open EBITDA of $172 million for the first quarter of 2008, compared to $114 million for the first quarter of 2007 driven by improvements in open wholesale contribution margin.
Adjusted EBITDA, which includes the effect of historical and operational wholesale hedges and gains on sales of assets and emission allowances, was $218 million for the first quarter of 2008, compared to $81 million for the first quarter of 2007. The increase was due to significant improvement in historical and operational hedges and improvements in open wholesale contribution margin.
Free cash flow provided by continuing operations was $241 million in the first quarter of 2008, compared to a free cash flow used in continuing operations of $37 million for the same period in 2007. The improvement was primarily due to higher adjusted EBITDA, as described above, and the timing of interest payments resulting from a debt refinancing in 2007.
“We are executing on our distinctive strategy for creating long-term value for shareholders,” said Mark Jacobs, president and chief executive officer. “Financial results for the first quarter improved along with market conditions. Going forward, we remain focused on operations excellence, financial flexibility and a disciplined approach to capital investment.”
On a GAAP basis, income from continuing operations before income taxes for the first quarter of 2008 was $600 million, compared to $412 million for the first quarter of 2007. 2008 GAAP results include net unrealized gains from energy derivatives of $558 million and a $34 million charge related to western states litigation and similar settlements. The reported numbers for 2007 include net unrealized gains from energy derivatives of $522 million and a $22 million charge for western states litigation and similar settlements. On a GAAP basis, operating cash flow from continuing operations was $302 million for the first quarter of 2008, compared to $35 million for the same period of 2007. Interest expense, net declined to $53 million for the first quarter of 2008, compared to $77 million for the first quarter of 2007. The decline was primarily related to lower debt levels in 2008.
1
OUTLOOK
Reliant Energy’s outlook for open EBITDA is $1,107 million, $1,257 million and $1,383 million for the years ending December 31, 2008, 2009 and 2010, respectively. Adjusted EBITDA, which includes the impact of historical and operational wholesale hedges and gains on the sales of assets and emission allowances, net is $1,368 million, $1,253 million and $1,354 million for the same periods. The outlook for free cash flow provided by continuing operations is $631 million, $637 million and $905 million for the years ending December 31, 2008, 2009 and 2010, respectively.
This outlook is based on forward commodity prices as of March 21, 2008, assumptions and estimates by Reliant Energy, and excludes Bighorn financial results beginning in the fourth quarter of 2008.
Open EBITDA
Outlook Reconciliation
Outlook Reconciliation
($ millions) | 2007A | 2008E | 2009E | 2010E | ||||||||||||
Income from continuing operations before income taxes | $ | 493 | $ | 906 | $ | 564 | $ | 741 | ||||||||
Unrealized (gains) losses on energy derivatives | (445 | ) | (202 | ) | 44 | (12 | ) | |||||||||
Western states litigation and similar settlements | 22 | 34 | — | — | ||||||||||||
Debt extinguishments | 73 | 1 | — | — | ||||||||||||
Depreciation and amortization | 424 | 419 | 477 | 465 | ||||||||||||
Interest expense, net | 315 | 210 | 168 | 160 | ||||||||||||
Adjusted EBITDA | $ | 882 | $ | 1,368 | $ | 1,253 | $ | 1,354 | ||||||||
Historical and operational wholesale hedges | 92 | (220 | ) | 4 | 29 | |||||||||||
Gains on sales of assets and emission allowances, net | (26 | ) | (41 | ) | — | — | ||||||||||
Open EBITDA | $ | 948 | $ | 1,107 | $ | 1,257 | $ | 1,383 |
Free Cash Flow from Continuing Operations
Outlook Reconciliation
Outlook Reconciliation
($ millions) | 2007A | 2008E | 2009E | 2010E | ||||||||||||
Operating cash flow from continuing operations1 | $ | 755 | $ | 1,112 | $ | 1,074 | $ | 1,185 | ||||||||
Western states litigation and similar settlements payments | 57 | 34 | — | — | ||||||||||||
Change in margin deposits, net | (297 | ) | (37 | ) | (16 | ) | (17 | ) | ||||||||
Adjusted cash flow provided by continuing operations | $ | 515 | $ | 1,109 | $ | 1,058 | $ | 1,168 | ||||||||
Maintenance capital expenditures and capitalized interest | (89 | ) | (103 | ) | (124 | ) | (90 | ) | ||||||||
Environmental capital expenditures2 | (100 | ) | (264 | ) | (125 | ) | (26 | ) | ||||||||
Emission allowances activity, net | (85 | ) | (111 | ) | (172 | ) | (147 | ) | ||||||||
Free cash flow provided by continuing operations | $ | 241 | $ | 631 | $ | 637 | $ | 905 |
1. | Outlook assumes no changes in working capital. | |
2. | Based on existing laws and regulations. Estimate represents the low end of the range. |
2
NON-GAAP FINANCIAL MEASURES
This press release and the attached financial tables include the following non-GAAP financial measures:
Retail gross margin
Retail contribution margin
Open energy gross margin
Open wholesale gross margin
Open wholesale contribution margin
EBITDA
Adjusted EBITDA
Open EBITDA
Adjusted cash flow provided by continuing operations
Free cash flow provided by continuing operations
Gross debt
Retail contribution margin
Open energy gross margin
Open wholesale gross margin
Open wholesale contribution margin
EBITDA
Adjusted EBITDA
Open EBITDA
Adjusted cash flow provided by continuing operations
Free cash flow provided by continuing operations
Gross debt
A reconciliation of these financial measures and the most directly comparable GAAP measures is included above or in the attached financial tables. Additional information regarding these measures, including a discussion of their usefulness and purpose, is included in the Form 8-K furnished along with this press release. Certain factors that could affect GAAP financial measures are not accessible on a forward-looking basis, but could be material to future reported earnings and cash flows.
WEBCAST OF EARNINGS CONFERENCE CALL
Reliant Energy has scheduled its first quarter 2008 earnings conference call for Thursday, May 1, 2008, at 10 a.m. CT. Interested parties may listen to a live audio broadcast of the conference call at www.reliant.com in the investors section. A replay of the call can be accessed approximately two hours after the completion of the call. A copy of the presentation accompanying the call is also available at this Website address.
Reliant Energy, Inc. (NYSE: RRI) based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the United States. In Texas, the company provides service to approximately 1.8 million retail electricity customers, including residential and small business customers and commercial, industrial, governmental and institutional customers. Reliant also serves commercial, industrial, governmental and institutional customers in the PJM (Pennsylvania, New Jersey and Maryland), Illinois and New York markets.
The company is one of the largest independent power producers in the nation with approximately 16,000 megawatts of power generation capacity across the United States. These strategically located generating assets utilize natural gas, fuel oil and coal. For more information, visitwww.reliant.com.
3
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements that contain projections, estimates or assumptions about our revenues, income, capital structure and other financial items, and our plans and objectives for future operations or about our future economic performance, transactions and dispositions and financings and approvals related thereto. In many cases you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and other similar words. However, the absence of these words does not mean that the statements are not forward-looking.
Actual results may differ materially from those expressed or implied by forward-looking statements as a result of many factors or events, including, but not limited to, legislative, regulatory and/or market developments, the outcome of pending lawsuits, governmental proceedings and investigations, the effects of competition, financial market conditions, access to capital, the timing and extent of changes in commodity prices and interest rates, weather conditions and other factors we discuss or refer to in the “Risk Factors” section of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
###
4
Reliant Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
(thousands of dollars, except per share amounts) | ||||||||
Revenues: | ||||||||
Revenues (including $(12,584) and $14,570 unrealized gains (losses)) (including $107,409 and $0 from affiliates) | $ | 2,815,424 | $ | 2,362,601 | ||||
Expenses: | ||||||||
Cost of sales (including $570,883 and $507,659 unrealized gains) (including $78,996 and $0 from affiliates) | 1,751,672 | 1,443,491 | ||||||
Operation and maintenance | 212,478 | 230,741 | ||||||
Selling, general and administrative | 75,650 | 87,597 | ||||||
Western states litigation and similar settlements | 34,000 | 22,000 | ||||||
Gains on sales of assets and emission allowances, net | (611 | ) | — | |||||
Depreciation and amortization | 88,594 | 91,969 | ||||||
Total operating expense | 2,161,783 | 1,875,798 | ||||||
Operating Income | 653,641 | 486,803 | ||||||
Other Income (Expense): | ||||||||
Income of equity investment, net | 207 | 1,160 | ||||||
Debt extinguishments | (423 | ) | — | |||||
Other, net | (64 | ) | 1,068 | |||||
Interest expense | (63,101 | ) | (87,070 | ) | ||||
Interest income | 9,504 | 10,464 | ||||||
Total other expense | (53,877 | ) | (74,378 | ) | ||||
Income from Continuing Operations Before Income Taxes | 599,764 | 412,425 | ||||||
Income tax expense | 228,787 | 152,062 | ||||||
Income from Continuing Operations | 370,977 | 260,363 | ||||||
Income (loss) from discontinued operations | 6,235 | (1,652 | ) | |||||
Net Income | $ | 377,212 | $ | 258,711 | ||||
Basic Earnings Per Share: | ||||||||
Income from continuing operations | $ | 1.07 | $ | 0.77 | ||||
Income (loss) from discontinued operations | 0.02 | (0.01 | ) | |||||
Net income | $ | 1.09 | $ | 0.76 | ||||
Diluted Earnings Per Share: | ||||||||
Income from continuing operations | $ | 1.05 | $ | 0.75 | ||||
Income (loss) from discontinued operations | 0.02 | (0.01 | ) | |||||
Net income | $ | 1.07 | $ | 0.74 | ||||
Weighted Average Common Shares Outstanding (in thousands): | ||||||||
- Basic | 345,419 | 339,345 | ||||||
- Diluted | 354,103 | 349,452 |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment — Adjusted and Open
(Unaudited)
Results of Operations by Segment — Adjusted and Open
(Unaudited)
Three Months Ended March 31, | ||||||||||||
2008 | 2007 | Change | ||||||||||
(millions of dollars) | ||||||||||||
Retail Energy: | ||||||||||||
Revenues | $ | 1,935 | $ | 1,701 | $ | 234 | ||||||
Cost of sales | 1,242 | 909 | 333 | |||||||||
Unrealized gains on energy derivatives | (528 | ) | (616 | ) | 88 | |||||||
Retail gross margin (1) | 165 | 176 | (11 | ) | ||||||||
Operation and maintenance | 60 | 61 | (1 | ) | ||||||||
Selling and marketing | 32 | 30 | 2 | |||||||||
Bad debt expense | 7 | 17 | (10 | ) | ||||||||
Retail contribution margin | 66 | 68 | (2 | ) | ||||||||
Unrealized gains on energy derivatives | 528 | 616 | (88 | ) | ||||||||
Contribution margin, including unrealized gains/losses on energy derivatives (2) | 594 | 684 | (90 | ) | ||||||||
Wholesale Energy: | ||||||||||||
Revenues | $ | 927 | $ | 748 | $ | 179 | ||||||
Cost of sales | 557 | 621 | (64 | ) | ||||||||
Historical and operational wholesale hedges | (45 | ) | 33 | (78 | ) | |||||||
Unrealized (gains) losses on energy derivatives | (30 | ) | 94 | (124 | ) | |||||||
Open wholesale gross margin (1) | 295 | 254 | 41 | |||||||||
Operation and maintenance | 152 | 170 | (18 | ) | ||||||||
Bad debt expense | 1 | (1 | ) | 2 | ||||||||
Open wholesale contribution margin | 142 | 85 | 57 | |||||||||
Historical and operational wholesale hedges | 45 | (33 | ) | 78 | ||||||||
Unrealized gains (losses) on energy derivatives | 30 | (94 | ) | 124 | ||||||||
Contribution margin, including historical and operational wholesale hedges and unrealized gains/losses on energy derivatives (2) | 217 | (42 | ) | 259 | ||||||||
Other Operations: | ||||||||||||
Revenues | $ | 4 | $ | 3 | $ | 1 | ||||||
Cost of sales | — | — | — | |||||||||
Operation and maintenance | 3 | 1 | 2 | |||||||||
Other operations contribution margin (2) | 1 | 2 | (1 | ) | ||||||||
Eliminations: | ||||||||||||
Revenues | $ | (51 | ) | $ | (90 | ) | $ | 39 | ||||
Cost of sales | (48 | ) | (87 | ) | 39 | |||||||
Operation and maintenance | (2 | ) | (1 | ) | (1 | ) | ||||||
Total | (1 | ) | (2 | ) | 1 | |||||||
Consolidated: | ||||||||||||
Retail contribution margin | $ | 66 | $ | 68 | $ | (2 | ) | |||||
Open wholesale contribution margin | 142 | 85 | 57 | |||||||||
Other operations contribution margin | 1 | 2 | (1 | ) | ||||||||
Eliminations | (1 | ) | (2 | ) | 1 | |||||||
Total | 208 | 153 | 55 | |||||||||
Other general and administrative | (36 | ) | (41 | ) | 5 | |||||||
Income of equity investment, net | — | 1 | (1 | ) | ||||||||
Other, net | — | 1 | (1 | ) | ||||||||
Open EBITDA | 172 | 114 | 58 | |||||||||
Historical and operational wholesale hedges | 45 | (33 | ) | 78 | ||||||||
Gains on sales of assets and emission allowances, net | 1 | — | 1 | |||||||||
Adjusted EBITDA | 218 | 81 | 137 | |||||||||
Unrealized gains on energy derivatives | 558 | 522 | 36 | |||||||||
Western states litigation and similar settlements | (34 | ) | (22 | ) | (12 | ) | ||||||
EBITDA | 742 | 581 | 161 | |||||||||
Depreciation and amortization | (89 | ) | (92 | ) | 3 | |||||||
Interest expense | (63 | ) | (87 | ) | 24 | |||||||
Interest income | 10 | 10 | — | |||||||||
Income from continuing operations before income taxes | $ | 600 | $ | 412 | $ | 188 | ||||||
(1) | Gross margin (revenues less cost of sales) excludes depreciation, amortization, labor and other product costs. | |
(2) | Segment profit and loss measure. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Consolidated Balance Sheets
(Unaudited)
March 31, 2008 | December 31, 2007 | |||||||
ASSETS | (thousands of dollars) | |||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 964,780 | $ | 754,962 | ||||
Restricted cash | 4,938 | 3,251 | ||||||
Accounts and notes receivable, principally customer, net of allowance of $27,118 and $36,724 | 982,690 | 1,082,746 | ||||||
Inventory | 258,146 | 285,408 | ||||||
Derivative assets | 2,096,201 | 663,049 | ||||||
Margin deposits | 130,880 | 139,834 | ||||||
Investment in and receivables from Channelview, net | 89,405 | 83,253 | ||||||
Prepayments and other current assets | 128,538 | 218,873 | ||||||
Current assets of discontinued operations | 6,235 | 2,133 | ||||||
Total current assets | 4,661,813 | 3,233,509 | ||||||
Property, plant and equipment, gross | 6,899,925 | 6,852,170 | ||||||
Accumulated depreciation | (1,695,217 | ) | (1,629,953 | ) | ||||
Property, Plant and Equipment, net | 5,204,708 | 5,222,217 | ||||||
Other Assets: | ||||||||
Goodwill, net | 379,644 | 379,644 | ||||||
Other intangibles, net | 394,455 | 405,338 | ||||||
Derivative assets | 584,837 | 376,535 | ||||||
Prepaid lease | 277,246 | 270,133 | ||||||
Other | 277,589 | 304,424 | ||||||
Total other assets | 1,913,771 | 1,736,074 | ||||||
Total Assets | $ | 11,780,292 | $ | 10,191,800 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities: | ||||||||
Current portion of long-term debt and short-term borrowings | $ | 11,668 | $ | 52,546 | ||||
Accounts payable, principally trade | 713,323 | 687,046 | ||||||
Derivative liabilities | 1,752,840 | 885,346 | ||||||
Margin deposits | 500 | 250 | ||||||
Other | 490,293 | 426,839 | ||||||
Total current liabilities | 2,968,624 | 2,052,027 | ||||||
Other Liabilities: | ||||||||
Derivative liabilities | 665,652 | 473,516 | ||||||
Other | 368,711 | 278,641 | ||||||
Long-term liabilities of discontinued operations | 4,000 | 3,542 | ||||||
Total other liabilities | 1,038,363 | 755,699 | ||||||
Long-term Debt | 2,895,429 | 2,902,346 | ||||||
Commitments and Contingencies | ||||||||
Temporary Equity Stock-based Compensation | 6,068 | 4,694 | ||||||
Stockholders’ Equity: | ||||||||
Preferred stock; par value $0.001 per share (125,000,000 shares authorized; none outstanding) | — | — | ||||||
Common stock; par value $0.001 per share (2,000,000,000 shares authorized; 345,606,056 and 344,579,508 issued) | 107 | 106 | ||||||
Additional paid-in capital | 6,222,618 | 6,215,512 | ||||||
Accumulated deficit | (1,258,314 | ) | (1,635,526 | ) | ||||
Accumulated other comprehensive loss | (92,603 | ) | (103,058 | ) | ||||
Total stockholders’ equity | 4,871,808 | 4,477,034 | ||||||
Total Liabilities and Equity | $ | 11,780,292 | $ | 10,191,800 | ||||
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
(thousands of dollars) | ||||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 377,212 | $ | 258,711 | ||||
(Income) loss from discontinued operations | (6,235 | ) | 1,652 | |||||
Net income from continuing operations | 370,977 | 260,363 | ||||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
Depreciation and amortization | 88,594 | 91,969 | ||||||
Deferred income taxes | 214,681 | 147,422 | ||||||
Net changes in energy derivatives | (547,565 | ) | (508,770 | ) | ||||
Amortization of deferred financing costs | 2,638 | 3,666 | ||||||
Western states litigation and similar settlements | 34,000 | — | ||||||
Other, net | 789 | 5,643 | ||||||
Changes in other assets and liabilities: | ||||||||
Accounts and notes receivable, net | 78,660 | 45,811 | ||||||
Change in notes, receivables and payables, with affiliates, net | (6,152 | ) | — | |||||
Inventory | 27,262 | 22,263 | ||||||
Margin deposits, net | 9,204 | 86,379 | ||||||
Net derivative assets and liabilities | (17,533 | ) | (19,944 | ) | ||||
Western states litigation and similar settlements payments | — | (35,000 | ) | |||||
Accounts payable | 28,743 | 24,385 | ||||||
Other current assets | (12,552 | ) | (4,741 | ) | ||||
Other assets | (2,234 | ) | (11,974 | ) | ||||
Taxes payable/receivable | 36,449 | 4,790 | ||||||
Other current liabilities | (5,490 | ) | (82,471 | ) | ||||
Other liabilities | 1,826 | 5,691 | ||||||
Net cash provided by continuing operations from operating activities | 302,297 | 35,482 | ||||||
Net cash provided by (used in) discontinued operations from operating activities | 1,757 | (1,664 | ) | |||||
Net cash provided by operating activities | 304,054 | 33,818 | ||||||
Cash Flows from Investing Activities: | ||||||||
Capital expenditures | (49,644 | ) | (42,167 | ) | ||||
Proceeds from sales of emission allowances | 1,717 | 1 | ||||||
Purchases of emission allowances | (4,073 | ) | (990 | ) | ||||
Restricted cash | (1,687 | ) | 14,142 | |||||
Net cash used in investing activities | (53,687 | ) | (29,014 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Payments of long-term debt | (45,193 | ) | (3,466 | ) | ||||
Increase in short-term borrowings and revolving credit facilities, net | — | 6,554 | ||||||
Payments of financing costs | — | (440 | ) | |||||
Payments of debt extinguishments | (423 | ) | — | |||||
Proceeds from issuances of stock | 5,067 | 16,685 | ||||||
Net cash provided by (used in) financing activities | (40,549 | ) | 19,333 | |||||
Net Change in Cash and Cash Equivalents | 209,818 | 24,137 | ||||||
Cash and Cash Equivalents at Beginning of Period | 754,962 | 463,909 | ||||||
Cash and Cash Equivalents at End of Period | $ | 964,780 | $ | 488,046 | ||||
Free Cash Flow Reconciliation
(Unaudited)
(Unaudited)
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
(millions of dollars) | ||||||||
Operating cash flow from continuing operations | $ | 302 | $ | 35 | ||||
Western states litigation and similar settlements payments | — | 57 | ||||||
Change in margin deposits, net | (9 | ) | (86 | ) | ||||
Adjusted cash flow provided by continuing operations | 293 | 6 | ||||||
Capital expenditures | (50 | ) | (42 | ) | ||||
Proceeds from sales of emission allowances | 2 | — | ||||||
Purchases of emission allowances | (4 | ) | (1 | ) | ||||
Free cash flow provided by (used in) continuing operations | $ | 241 | $ | (37 | ) | |||
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
Retail Energy Data
(Unaudited)
Retail Energy Data
(Unaudited)
Three Months Ended March 31, | ||||||||||||
2008 | 2007 | Change | ||||||||||
(in millions) | ||||||||||||
Mass gross margin | $ | 127 | $ | 160 | $ | (33 | ) | |||||
Commercial and industrial gross margin | 39 | 20 | 19 | |||||||||
Market usage adjustments | (1 | ) | (4 | ) | 3 | |||||||
Retail gross margin | 165 | 176 | (11 | ) | ||||||||
Operation and maintenance | (60 | ) | (61 | ) | 1 | |||||||
Selling and marketing | (32 | ) | (30 | ) | (2 | ) | ||||||
Bad debt expense | (7 | ) | (17 | ) | 10 | |||||||
Retail contribution margin | 66 | 68 | (2 | ) | ||||||||
Unrealized gains on energy derivatives | 528 | 616 | (88 | ) | ||||||||
Total retail energy contribution margin, including unrealized gains/losses on energy derivatives (1) | $ | 594 | $ | 684 | $ | (90 | ) | |||||
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
(gigawatt hours) | ||||||||
Electricity Sales to End-Use Retail Customers: | ||||||||
Mass: | ||||||||
Residential: | ||||||||
Houston | 2,381 | 2,690 | ||||||
Non-Houston | 1,828 | 1,952 | ||||||
Small Business: | ||||||||
Houston | 593 | 725 | ||||||
Non-Houston | 303 | 333 | ||||||
Total Mass | 5,105 | 5,700 | ||||||
Commercial and Industrial: | ||||||||
ERCOT (2) | 8,635 | 7,857 | ||||||
Non-ERCOT | 1,324 | 1,006 | ||||||
Total Commercial and Industrial | 9,959 | 8,863 | ||||||
Market usage adjustments | (73 | ) | (86 | ) | ||||
Total | 14,991 | 14,477 | ||||||
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
(in thousands, metered locations) | ||||||||
Weighted Average Retail Customer Count: | ||||||||
Mass: | ||||||||
Residential: | ||||||||
Houston | 1,003 | 1,083 | ||||||
Non-Houston | 550 | 555 | ||||||
Small Business: | ||||||||
Houston | 108 | 121 | ||||||
Non-Houston | 38 | 33 | ||||||
Total Mass | 1,699 | 1,792 | ||||||
Commercial and Industrial: | ||||||||
ERCOT (2) | 90 | 83 | ||||||
Non-ERCOT | 2 | 1 | ||||||
Total Commercial and Industrial | 92 | 84 | ||||||
Total | 1,791 | 1,876 | ||||||
March 31, | December 31, | |||||||
2008 | 2007 | |||||||
(in thousands, metered locations) | ||||||||
Retail Customers: | ||||||||
Mass: | ||||||||
Residential: | ||||||||
Houston | 993 | 1,016 | ||||||
Non-Houston | 546 | 555 | ||||||
Small Business: | ||||||||
Houston | 108 | 109 | ||||||
Non-Houston | 38 | 38 | ||||||
Total Mass | 1,685 | 1,718 | ||||||
Commercial and Industrial: | ||||||||
ERCOT (2) | 89 | 91 | ||||||
Non-ERCOT | 2 | 2 | ||||||
Total Commercial and Industrial | 91 | 93 | ||||||
Total | 1,776 | 1,811 | ||||||
(1) | Retail energy segment profit and loss measure. | |
(2) | Includes customers of the Texas General Land Office for whom we provide services. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
Wholesale Energy Data
(Unaudited)
Wholesale Energy Data
(Unaudited)
Three Months Ended March 31, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
GWh | % Economic (1) | GWh | % Economic (1) | |||||||||||||
Economic Generation (2) (3): | ||||||||||||||||
PJM Coal | 5,963.9 | 82 | % | 6,098.5 | 84 | % | ||||||||||
MISO Coal | 2,048.4 | 74 | % | 2,181.5 | 81 | % | ||||||||||
PJM/MISO Gas | 60.8 | 1 | % | 74.8 | 1 | % | ||||||||||
West | 238.4 | 3 | % | 8.5 | 0 | % | ||||||||||
Other | — | 0 | % | 1,336.9 | 65 | % | ||||||||||
Total | 8,311.5 | 34 | % | 9,700.2 | 37 | % | ||||||||||
Commercial Capacity Factor (4): | ||||||||||||||||
PJM Coal | 84.9 | % | 79.2 | % | ||||||||||||
MISO Coal | 75.3 | % | 61.3 | % | ||||||||||||
PJM/MISO Gas | 93.9 | % | 64.4 | % | ||||||||||||
West | 76.3 | % | 100.0 | % | ||||||||||||
Other | 0.0 | % | 90.8 | % | ||||||||||||
Total | 82.3 | % | 76.7 | % | ||||||||||||
Generation (3): | GWh | GWh | ||||||||||||||
PJM Coal | 5,062.9 | 4,832.3 | ||||||||||||||
MISO Coal | 1,542.3 | 1,336.3 | ||||||||||||||
PJM/MISO Gas | 57.1 | 48.2 | ||||||||||||||
West | 181.8 | 8.5 | ||||||||||||||
Other | — | 1,214.1 | ||||||||||||||
Total | 6,844.1 | 7,439.4 | ||||||||||||||
Open Energy Unit Margin ($/MWh) (5): | ||||||||||||||||
PJM Coal | $ | 33.78 | $ | 30.83 | ||||||||||||
MISO Coal | 29.83 | 27.69 | ||||||||||||||
PJM/MISO Gas | 87.57 | 20.75 | ||||||||||||||
West | NM | (6) | NM | (6) | ||||||||||||
Other | — | 5.77 | ||||||||||||||
Weighted average total | $ | 31.71 | $ | 25.54 | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2008 | 2007 | Change | ||||||||||
Open energy gross margin (7): | (in millions) | |||||||||||
PJM Coal | $ | 171 | $ | 149 | $ | 22 | ||||||
MISO Coal | 46 | 37 | 9 | |||||||||
PJM/MISO Gas | 5 | 1 | 4 | |||||||||
West | (5 | ) | (4 | ) | (1 | ) | ||||||
Other | — | 7 | (7 | ) | ||||||||
Total | 217 | 190 | 27 | |||||||||
Other margin (8): | ||||||||||||
PJM Coal | 18 | 7 | 11 | |||||||||
MISO Coal | 2 | 2 | — | |||||||||
PJM/MISO Gas | 27 | 11 | 16 | |||||||||
West | 22 | 23 | (1 | ) | ||||||||
Other | 9 | 21 | (12 | ) | ||||||||
Total | 78 | 64 | 14 | |||||||||
Open wholesale gross margin | 295 | 254 | 41 | |||||||||
Operation and maintenance | (152 | ) | (170 | ) | 18 | |||||||
Bad debt expense | (1 | ) | 1 | (2 | ) | |||||||
Open wholesale contribution margin | 142 | 85 | 57 | |||||||||
Historical and operational wholesale hedges | ||||||||||||
Power | (18 | ) | (56 | ) | 38 | |||||||
Fuel | 45 | 5 | 40 | |||||||||
Tolling/Other | 18 | 18 | — | |||||||||
Total historical and operational wholesale hedges | 45 | (33 | ) | 78 | ||||||||
Unrealized gains (losses) on energy derivatives | 30 | (94 | ) | 124 | ||||||||
Total wholesale energy contribution margin, including historical and operational wholesale hedges and unrealized gains/losses on energy derivatives (9) | $ | 217 | $ | (42 | ) | $ | 259 | |||||
(1) | Represents economic generation (hours) divided by maximum generation hours (maximum plant capacity multiplied by 8,760 hours). | |
(2) | Estimated generation at 100% plant availability based on an hourly analysis of when it is economical to generate based on the price of power, fuel, emission allowances and variable operating costs. | |
(3) | Excludes generation related to power purchase agreements, including tolling agreements. | |
(4) | Generation divided by economic generation. | |
(5) | Represents open energy gross margin divided by generation. | |
(6) | NM is not meaningful. | |
(7) | Open energy gross margin is calculated using the power sales prices received by the plants less delivered spot fuel prices. | |
This figure excludes the effects of other margin, our historical and operational wholesale hedges and unrealized gains/losses on energy derivatives. | ||
(8) | Other margin represents power purchase agreements, capacity payments, ancillary services revenues and selective commercial hedge strategies. | |
(9) | Wholesale energy segment profit and loss measure. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
PJM Coal and MISO Coal (1)
(Unaudited)
PJM Coal and MISO Coal (1)
(Unaudited)
Summer/Winter | |||||||||||||||||||||||||||||||||
Average | Q1 economic | Q1 commercial | |||||||||||||||||||||||||||||||
Capacity | Heat Rate | generation (GWh) | capacity factor | Q1 generation (GWh) | |||||||||||||||||||||||||||||
Unit Name | (MW) | (MMBtu/MWh) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||||||
Cheswick | 580 | 10.0 | 841.0 | 918.1 | 90.7 | % | 92.2 | % | 762.7 | 846.3 | |||||||||||||||||||||||
Conemaugh (2) | 280 | 9.4 | 599.7 | 595.8 | 93.8 | % | 92.5 | % | 562.8 | 550.9 | |||||||||||||||||||||||
Elrama | 465 | 11.3 | 698.1 | 847.5 | 82.3 | % | 72.0 | % | 574.8 | 609.8 | |||||||||||||||||||||||
Keystone (2) | 282 | 9.5 | 609.2 | 586.8 | 96.9 | % | 67.5 | % | 590.6 | 395.8 | |||||||||||||||||||||||
Portland | 400 | 9.8 | 717.2 | 679.7 | 88.0 | % | 79.4 | % | 631.0 | 539.8 | |||||||||||||||||||||||
Seward | 521 | 9.6 | 1,084.8 | 1,066.1 | 67.2 | % | 53.5 | % | 728.8 | 570.8 | |||||||||||||||||||||||
Shawville (2) | 566 | 10.3 | 1,053.2 | 1,044.9 | 83.2 | % | 94.5 | % | 876.3 | 987.7 | |||||||||||||||||||||||
Titus | 246 | 10.8 | 360.7 | 359.6 | 93.1 | % | 92.1 | % | 335.9 | 331.2 | |||||||||||||||||||||||
PJM Coal Total | 3,340 | 5,963.9 | 6,098.5 | 84.9 | % | 79.2 | % | 5,062.9 | 4,832.3 | ||||||||||||||||||||||||
Summer/Winter | ||||||||||||||||||||||||||||||||
Average | Q1 economic | Q1 commercial | ||||||||||||||||||||||||||||||
Capacity | Heat Rate | generation (GWh) | capacity factor | Q1 generation (GWh) | ||||||||||||||||||||||||||||
Unit Name | (MW) | (MMBtu/MWh) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||
Avon Lake | 721 | 9.3 | 1,162.7 | 1,304.6 | 66.7 | % | 47.5 | % | 775.4 | 619.7 | ||||||||||||||||||||||
New Castle | 328 | 10.6 | 495.5 | 507.7 | 89.5 | % | 77.8 | % | 443.7 | 394.9 | ||||||||||||||||||||||
Niles | 216 | 10.5 | 390.2 | 369.2 | 82.8 | % | 87.1 | % | 323.2 | 321.7 | ||||||||||||||||||||||
MISO Coal Total | 1,265 | 2,048.4 | 2,181.5 | 75.3 | % | 61.3 | % | 1,542.3 | 1,336.3 | |||||||||||||||||||||||
(1) | Unless otherwise indicated, the Company owns a 100% interest in each facility listed. | |
(2) | The Company leases a 100% interest in the Shawville facility, a 16.67% interest in the Keystone facility and a 16.45% interest in the Conemaugh facility under facility interest lease agreements, which expire in 2026, 2034 and 2034, respectively. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
PJM/MISO Gas (1)
(Unaudited)
PJM/MISO Gas (1)
(Unaudited)
Summer/Winter | ||||||||||||||||||||||||||||||||
Average | Q1 economic | Q1 commercial | ||||||||||||||||||||||||||||||
Capacity | Heat Rate | generation (GWh) | capacity factor | Q1 generation (GWh) | ||||||||||||||||||||||||||||
Unit Name | (MW) | (MMBtu/MWh) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||
Aurora (2) | 942 | 10.5 | 4.0 | 3.7 | 100.0 | % | 0.0 | % | 4.0 | — | ||||||||||||||||||||||
Blossburg | 23 | 14.6 | 6.6 | 3.3 | 90.9 | % | 100.0 | % | 6.0 | 3.3 | ||||||||||||||||||||||
Brunot Island | 315 | 10.4 | — | 0.8 | 0.0 | % | 100.0 | % | — | 0.8 | ||||||||||||||||||||||
Gilbert | 614 | 11.0 | 4.2 | 15.8 | 100.0 | % | 82.9 | % | 4.2 | 13.1 | ||||||||||||||||||||||
Glen Gardner | 184 | 14.6 | 0.3 | 0.2 | 100.0 | % | 100.0 | % | 0.3 | 0.2 | ||||||||||||||||||||||
Hamilton | 23 | 14.8 | 0.2 | — | 100.0 | % | 0.0 | % | 0.2 | — | ||||||||||||||||||||||
Hunterstown | 71 | 14.8 | 0.4 | — | 100.0 | % | 0.0 | % | 0.4 | — | ||||||||||||||||||||||
Hunterstown CCGT | 833 | 7.0 | 7.7 | 44.2 | 100.0 | % | 55.7 | % | 7.7 | 24.6 | ||||||||||||||||||||||
Mountain | 47 | 14.3 | 2.2 | 1.2 | 100.0 | % | 100.0 | % | 2.2 | 1.2 | ||||||||||||||||||||||
Orrtanna | 23 | 14.4 | 0.3 | 0.4 | 100.0 | % | 100.0 | % | 0.3 | 0.4 | ||||||||||||||||||||||
Portland | 185 | 11.2 | 5.4 | 3.2 | 100.0 | % | 100.0 | % | 5.4 | 3.2 | ||||||||||||||||||||||
Sayreville | 264 | 13.8 | 25.6 | 0.6 | 88.3 | % | 0.0 | % | 22.6 | — | ||||||||||||||||||||||
Shawnee | 23 | 14.0 | — | 0.1 | 0.0 | % | 100.0 | % | — | 0.1 | ||||||||||||||||||||||
Shawville 5-7 (3) | 6 | 10.2 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Titus | 35 | 17.4 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Tolna | 47 | 14.2 | 0.4 | 0.8 | 100.0 | % | 100.0 | % | 0.4 | 0.8 | ||||||||||||||||||||||
Warren | 252 | 12.8 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Werner | 68 | 13.8 | 3.5 | 0.5 | 97.1 | % | 100.0 | % | 3.4 | 0.5 | ||||||||||||||||||||||
Shelby | 356 | 9.8 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
PJM/MISO Gas Total | 4,311 | 60.8 | 74.8 | 93.9 | % | 64.4 | % | 57.1 | 48.2 | |||||||||||||||||||||||
(1) | Unless otherwise indicated, the Company owns a 100% interest in each facility listed. | |
(2) | Excludes generation during periods the unit operated under power purchase agreements. | |
(3) | The Company leases a 100% interest in the Shawville facility under a facility interest lease agreement, which expires in 2026. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
West and Other (1)
(Unaudited)
West and Other (1)
(Unaudited)
West
Summer/Winter | ||||||||||||||||||||||||||||||||
Average | Q1 economic | Q1 commercial | ||||||||||||||||||||||||||||||
Capacity | Heat Rate | generation (GWh) | capacity factor | Q1 generation (GWh) | ||||||||||||||||||||||||||||
Unit Name | (MW) | (MMBtu/MWh) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||
Bighorn | 598 | 7.2 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Coolwater | 622 | 10.1 | 94.1 | — | 80.2 | % | 0.0 | % | 75.5 | — | ||||||||||||||||||||||
Ellwood (2) | 54 | 13.3 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Etiwanda (2) | 640 | 10.0 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Mandalay (2) | 560 | 10.9 | 60.6 | 8.5 | 100.0 | % | 100.0 | % | 60.6 | 8.5 | ||||||||||||||||||||||
Ormond Beach | 1,516 | 9.6 | 83.7 | — | 54.6 | % | 0.0 | % | 45.7 | — | ||||||||||||||||||||||
West Total | 3,990 | 238.4 | 8.5 | 76.3 | % | 100.0 | % | 181.8 | 8.5 | |||||||||||||||||||||||
Other
Summer/Winter | ||||||||||||||||||||||||||||||||
Average | Q1 economic | Q1 commercial | ||||||||||||||||||||||||||||||
Capacity | Heat Rate | generation (GWh) | capacity factor | Q1 generation (GWh) | ||||||||||||||||||||||||||||
Unit Name | (MW) | (MMBtu/MWh) | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | ||||||||||||||||||||||||
Channelview (3) | 830 | 6.1 | — | 1,336.9 | 0.0 | % | 90.8 | % | — | 1,214.1 | ||||||||||||||||||||||
Choctaw | 800 | 7.0 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Indian River (2) | 587 | 10.5 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Osceola (2) | 470 | 11.0 | — | — | 0.0 | % | 0.0 | % | — | — | ||||||||||||||||||||||
Other Total | 2,687 | — | 1,336.9 | 0.0 | % | 90.8 | % | — | 1,214.1 | |||||||||||||||||||||||
(1) | Unless otherwise indicated, the Company owns a 100% interest in each facility listed. | |
(2) | Excludes generation during periods the unit operated under power purchase agreements. | |
(3) | Channelview was deconsolidated on August 20, 2007. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
Capital Expenditures Forecast
(Unaudited)
Capital Expenditures Forecast
(Unaudited)
2008E | 2009E | 2010E | ||||||||||
(in millions) | ||||||||||||
Maintenance capital expenditures: | ||||||||||||
Retail energy | $ | 21 | $ | 14 | $ | 14 | ||||||
Wholesale energy | 55 | 62 | 54 | |||||||||
Other operations | 4 | 7 | 6 | |||||||||
80 | 83 | 74 | ||||||||||
Environmental (1) | 264 | 125 | 26 | |||||||||
Capitalized interest | 23 | 41 | 16 | |||||||||
Total capital expenditures | $ | 367 | $ | 249 | $ | 116 | ||||||
(1) | Based on existing laws and regulations; estimate represents the low end of the range. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
Reliant Energy, Inc. and Subsidiaries
Gross Debt
(Unaudited)
Gross Debt
(Unaudited)
March 31, 2008 | ||||
(in millions) | ||||
Debt: | ||||
Senior secured revolver | $ | — | ||
Senior secured notes | 667 | |||
Senior unsecured notes | 1,313 | |||
Convertible senior subordinated notes | 2 | |||
Orion Power 12% notes (1) | 425 | |||
PEDFA fixed-rate bonds for Seward plant | 500 | |||
Channelview (2) | — | |||
Retail working capital facility | — | |||
Warrants | (1 | ) | ||
Other (3) | 1 | |||
Total GAAP debt | 2,907 | |||
REMA operating leases (off-balance sheet) | 461 | |||
Gross Debt (4) | $ | 3,368 | ||
(1) | Orion 12% notes include purchase accounting adjustments of $25 million. | |
(2) | Channelview was deconsolidated on August 20, 2007. | |
(3) | Other subsidiary debt. | |
(4) | Gross debt includes off-balance sheet REMA leases of $461 million. |
Reference is made to Reliant Energy, Inc.’s Annual Report
on Form 10-K for the year ended December 31, 2007.
on Form 10-K for the year ended December 31, 2007.
FOR ADDITIONAL INQUIRIES PLEASE CONTACT:
Dennis Barber
(713) 497-3042
(713) 497-3042