NRG Energy Posts Hefty Loss, Reintegrates NRG Renew; Cuts Annual Dividend

(RTTNews) - NRG Energy Inc. (NRG) reported that its net loss for the fourth-quarter was $6.36 billion, compared to net income of $97 million in the prior year. The latest-quarter result included non-cash impairment charges of $4.823 billion, non-cash income tax expense of $1.385 billion.

Net loss for the twelve months of 2015 was $6.436 billion, including non-cash charges of $3.306 billion and $3.039 billion for asset impairments net of taxes and income tax valuation allowance expense, respectively. These non-cash charges were primarily driven by the low commodity cycle and its impact on the Texas wholesale business. This resulted in a $19.46 loss per common share in 2015 compared to net income of $132 million and or $0.23 per share in 2014. Excluding the impact of the impairments and tax valuation allowance, the Company's net loss would have been $91 million or $0.34 loss per common share for the twelve months of 2015.

NRG also announced the reintegration of business renewables (formerly GreenCo's NRG Renew) back into NRG. This move supports NRG's advantaged position to participate in the changing landscape of the power industry and serve customers, especially with on- and offsite solar and distributed generation in the commercial and industrial space.

NRG's Board has approved a reduction in the annual dividend to $0.12 per share from $0.58 per share. The reduction will allow NRG to reallocate approximately $145 million annually and provides additional flexibility to create shareholder value through all commodity, credit, and development cycles and seize market opportunities.

The company has amended its partnership agreements with NRG Yield in order to reallocate $50 million of NRG Yield's previously committed cash equity from the residential solar partnership to the business renewables partnership. This amendment reinforces NRG Energy's relationship with NRG Yield by ensuring NRG Yield's investment capital is more closely aligned with NRG Energy's focus on renewable energy.

NRG reaffirmedits guidance range for 2016 with respect to both Adjusted EBITDA and FCF before growth investments. The Company's 2016 guidance now includes GreenCo's NRG Renew.

Through February 29, 2016, the Company utilized $385 million ($417 million par) of the $500 million of capital allocated to debt reduction at the NRG Corporate-level announced on its third quarter 2015 earnings conference call. NRG intends to complete the remaining debt repurchases under the previously announced program and is allocating an additional $925 million towards additional NRG debt repurchases in 2016 for a total of $1.3 billion of incremental debt reduction.

When combined with 2016 repurchases already completed and approximately $370 million in non-discretionary amortization primarily associated with project financings, debt reduction represents nearly 75% of total NRG capital allocated in 2016.