HOUSTON, Feb. 21 /PRNewswire-FirstCall/ -- Reliant Energy, Inc. reported a
loss from continuing operations before income taxes of $255 million for the
fourth quarter of 2005, compared to $324 million for the same period of 2004.
The reported numbers include net losses from unrealized energy derivatives of
$86 million and $138 million, respectively for 2005 and 2004. Loss from
continuing operations before income taxes was $668 million for the twelve
months ended December 31, 2005, compared to $392 million for the same period
of 2004. The reported numbers include net losses from unrealized energy
derivatives of $177 million and $224 million, respectively for 2005 and 2004.
"Since our third-quarter call, we have undertaken an in-depth review of
our strategy and have identified several elements that are critical to
unlocking the value of the company," said Joel Staff, chairman and chief
executive officer. "Our priorities for 2006 will include completing the
transition to a fully competitive retail market in Texas, converting to an
open model in our wholesale business, improving the commercial capacity factor
of our generating plants and managing our collateral exposure to reduce
postings by $1 billion by year end. These measures, combined with recent
commodity prices, are expected to yield more than $1 billion in annual open
EBITDA."
Open EBITDA (earnings before interest, income taxes, depreciation and
amortization) was $200 million for the fourth quarter of 2005, compared to $50
million for the fourth quarter of 2004. The company believes that open EBITDA
provides a meaningful representation of the earnings power of the company as
it excludes the impact of historical wholesale hedging activity, gains on the
sales of emission allowances, gains or losses on the sales of assets and gains
or losses on the sales of equity method investments. The increase was
primarily related to improvements in wholesale unit margins and increased
economic hours, partially offset by lower retail gross margin and a reduction
in the commercial capacity factor for the wholesale generation assets.
Adjusted EBITDA was $47 million for the fourth quarter of 2005, compared
to $95 million for the fourth quarter of 2004. The reduction was primarily
related to lower gross margin, partially offset by net gains from the sales of
emission allowances and lower expenses. Adjusted EBITDA for the year ended
December 31, 2005 was $697 million compared to $719 million for the same
period of 2004. The reduction was primarily related to lower retail gross
margin, partially offset by net gains from the sales of emission allowances
and lower expenses.
During the year ended December 31, 2005, the company reported a $1,110
million use of cash in continuing operations from operating activities,
compared to cash provided in continuing operations of $5 million in 2004. The
reported numbers include increases in cash margin deposits totaling $1,214
million in 2005 and $451 million for 2004. Free cash flow from continuing
operations for the year ended December 31, 2005 was $22 million, compared to
$274 million in 2004. The decrease in free cash flow was primarily related to
lower gross margin and changes in working capital.
Open EBITDA
Outlook Reconciliation
($ millions) 2006 2007 2008
Income (loss) from continuing
operations before income
taxes (a) ($62) $136 $186
Delivery of product underlying
the unrealized (gains) losses
on energy derivatives (126) (27) 1
Depreciation and amortization 378 466 579
Interest expense, net 380 317 283
Adjusted EBITDA (a) $570 $892 $1,049
Historical wholesale hedges (b) 643 250 108
Gains on sales of emission
allowances (a),(c) (122) -- --
Open EBITDA (a) $1,091 $1,142 $1,157
(a) Certain factors that could affect GAAP financial measures are not
accessible on a forward-looking basis, but could be material to future
reported earnings.
(b) Historical wholesale hedges excluded from Open EBITDA are primarily
related to closed and remaining power hedges, fuel hedges, long-term
tolling purchases and gas transportation and are calculated using
forward commodity prices as of December 29, 2005.
(c) Sales as of February 2, 2006.
Adjusted EBITDA Reconciliation
Three Months Ended Twelve Months
December 31, Ended December 31,
($ millions) 2005 2004 2005 2004
Loss from continuing
operations before income
taxes ($255) ($324) ($668) ($392)
Depreciation and
amortization 110 104 446 453
Interest expense, net 98 144 376 383
EBITDA (47) (76) 154 444
Changes in California-
related receivables and
reserves --- 33 (1) 11
Western states and
Cornerstone settlements 8 --- 359 ---
Unrealized losses on
energy derivatives (a) 86 138 177 224
Settlement of shareholder
class action lawsuits --- --- 8 ---
October 2003 FERC
settlement --- --- --- 12
Gain on sale of
counterparty claim --- --- --- (30)
Gain on sale of ICE --- (9) --- (9)
Gains recorded prior to
2003 that were realized/
collected
(EITF No. 02-03) --- 5 --- 21
2004 accrual for payment
to CenterPoint
Energy, Inc. --- --- --- 2
2004 severance and
restructuring costs --- 4 --- 44
Adjusted EBITDA $47 $95 $697 $719
(a) Reliant Energy's hedging activities include buying power supply for
its retail business, selling the output of and buying fuel for its
power plants, as well as winding down legacy trading positions and
optimization of gas transport and storage positions. Some of these
hedging transactions use mark-to-market accounting, which requires the
company to record gains/losses related to future periods based on
current changes in forward commodity prices. The company refers to
these gains and losses prior to settlement, as well as ineffectiveness
on cash flow hedges as "unrealized gains/losses on energy
derivatives." In some cases, the related underlying transactions
being hedged receive accrual accounting treatment, resulting in a
mismatch of accounting treatments.
Free Cash Flow Reconciliation
Twelve Months Ended
December 31,
($ millions) 2005 2004
Operating cash flow from
continuing operations ($1,110) $5
Accounts receivable factoring --- (232)
Payment to CenterPoint Energy --- 177
Change in margin deposits (a) 1,214 451
2004 cash severance costs --- 33
Capital expenditures (82) (160)
Free cash flow from continuing
operations $22 $274
(a) Reliant Energy posts collateral to support most commodity sales and
purchase transactions. The collateral provides assurance to
counterparties that contractual obligations will be fulfilled. As the
obligations are fulfilled, the collateral is returned. Reliant Energy
commonly uses both cash and letters of credit as collateral. The use
of cash as collateral appears as an asset on the balance sheet and as
a use of cash in operating cash flow. When cash collateral is
returned, the asset is eliminated from the balance sheet and it
appears as a source of cash in operating cash flow. Changes in margin
deposits reflect the net inflows and outflows of cash collateral and
are driven by hedging levels and changes in commodity prices, not by
the cash flow generated by the business related to sales and purchases
in the reporting period.
NON-GAAP FINANCIAL MEASURES
This press release and the attached financial tables include the following
non-GAAP financial measures:
Contribution margin
Adjusted contribution margin
Adjusted gross margin
Free cash flow
Open wholesale gross margin
EBITDA
Adjusted EBITDA
Open EBITDA
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 filed
along with this press release.
WEBCAST OF EARNINGS CONFERENCE CALL
Reliant Energy has scheduled its fourth-quarter 2005 earnings conference
call for Tuesday, February 21, 2006, at 10:00 a.m., Central time. Interested
parties may listen to a live audio broadcast of the conference call at
http://www.reliant.com/corporate. 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 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 1.9
million retail electricity customers, including residential and small business
customers and large commercial, industrial, governmental and institutional
customers. Reliant also serves commercial, industrial, governmental and
institutional customers in the PJM (Pennsylvania, New Jersey and Maryland)
market.
The company is one of the largest independent power producers in the
nation with approximately 16,000 megawatts of power generation capacity from
continuing operations across the United States. These strategically located
generating assets utilize natural gas, fuel oil and coal. For more
information, visit http://www.reliant.com/corporate.
This news release contains "forward-looking statements." Forward-looking
statements are statements that contain projections, estimates or assumptions
about our revenues, income and other financial items, our plans for the
future, future economic performance, transactions and dispositions and
financings related thereto. Forward-looking statements relate to future events
and anticipated revenues, earnings, business strategies, competitive position
or other aspects of our operations or operating results. 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.
We have based our forward-looking statements on management's beliefs and
assumptions based on information available to management at the time the
statements are made. Actual results may differ materially from those expressed
or implied by forward-looking statements as a result of many factors or
events, including legislative and regulatory 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,
changes in our business plan and other factors we discuss in our filings 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.
Information in this release is subject to adjustment resulting from
further review and the obtaining of additional information that impacts the
consolidated financial statements.
Reliant Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(Thousands of Dollars, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
Revenues:
Revenues (including
$123,768, $(16,455),
$(203,081) and $(32,007)
unrealized gains
(losses)) $2,615,265 $1,953,826 $9,726,995 $8,098,222
Expenses:
Purchased power, fuel and
cost of gas sold
(including $(209,637),
$(121,550), $25,846 and
$(192,395) unrealized
gains (losses)) 2,477,475 1,772,244 8,354,921 6,564,137
Operation and
maintenance 180,849 194,900 736,954 782,462
Selling and marketing 28,930 20,041 95,256 81,741
Bad debt expense 14,181 8,703 58,008 45,707
Total 2,701,435 1,995,888 9,245,139 7,474,047
Contribution Margin (86,170) (42,062) 481,856 624,175
Other general and
administrative 7,393 47,049 139,222 198,723
Western states and
Cornerstone settlements 8,631 - 359,436 -
Loss on sales of
receivables - - - 33,741
Accrual for payment to
CenterPoint Energy, Inc. - - - 1,600
Gain on sale of
counterparty claim - - - (30,000)
Gains on sales of assets
and emission allowances,
net (52,322) (4,954) (168,114) (19,834)
Depreciation and
amortization 109,341 104,512 445,871 453,042
Total 73,043 146,607 776,415 637,272
Operating Loss (159,213) (188,669) (294,559) (13,097)
Other Income (Expense):
Income (loss) of equity
investments, net 2,273 (234) 25,458 (9,478)
Other, net 146 9,021 (22,672) 13,455
Loss Before Interest and
Taxes (156,794) (179,882) (291,773) (9,120)
Interest expense (105,601) (149,970) (399,281) (417,514)
Interest income 7,947 5,952 23,227 34,960
Loss from Continuing
Operations Before Income
Taxes (254,448) (323,900) (667,827) (391,674)
Income tax benefit (47,851) (110,914) (203,080) (115,214)
Loss from Continuing
Operations (206,597) (212,986) (464,747) (276,460)
Income (loss) from
discontinued operations 49,145 (51,372) 110,799 239,800
Loss Before Cumulative
Effect of Accounting
Changes (157,452) (264,358) (353,948) (36,660)
Cumulative effect of
accounting changes, net
of tax (608) - (608) 7,290
Net Loss $(158,060) $(264,358) $(354,556) $(29,370)
Basic and Diluted Earnings
(Loss) Per Share:
Loss from continuing
operations $(0.68) $(0.71) $(1.54) $(0.93)
Income (loss) from
discontinued operations 0.16 (0.17) 0.37 0.81
Cumulative effect of
accounting changes, net
of tax - - - 0.02
Net Loss $(0.52) $(0.88) $(1.17) $(0.10)
Weighted Average Common
Shares Outstanding (in
thousands):
- Basic 304,849 298,979 302,409 297,527
- Diluted 304,849 298,979 302,409 297,527
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment - As Reported
(Millions of Dollars)
(Unaudited)
Three Months Ended
December 31, December 31,
2005 2004 Change
Retail Energy:
Revenues:
Revenues $1,736 $1,466 $270
Operating Expenses:
Purchased power, fuel and cost of
gas sold 1,781 1,418 363
Gross margin (45) 48 (93)
Operation and maintenance 48 50 (2)
Selling and marketing 29 20 9
Bad debt expense 14 8 6
Contribution margin - Retail Energy (136) (30) (106)
Wholesale Energy:
Revenues:
Revenues 1,059 584 475
Operating Expenses:
Purchased power, fuel and cost of
gas sold 878 450 428
Gross margin 181 134 47
Operation and maintenance 132 145 (13)
Bad debt expense - 1 (1)
Contribution margin - Wholesale
Energy 49 (12) 61
Other Operations:
Revenues:
Revenues 2 - 2
Gross margin 2 - 2
Operation and maintenance 1 - 1
Contribution margin - Other Operations 1 - 1
Eliminations:
Revenues:
Revenues (182) (96) (86)
Operating Expenses:
Purchased power, fuel and cost of
gas sold (182) (96) (86)
Gross margin - - -
Consolidated:
Revenues:
Revenues 2,615 1,954 661
Operating Expenses:
Purchased power, fuel and cost of
gas sold 2,477 1,772 705
Gross margin 138 182 (44)
Operation and maintenance 181 195 (14)
Selling and marketing 29 20 9
Bad debt expense 14 9 5
Contribution margin - Consolidated (86) (42) (44)
Other general and administrative 8 48 (40)
Western states and Cornerstone
settlements 8 - 8
Gains on sales of assets and
emission allowances, net (52) (5) (47)
Depreciation and amortization 110 104 6
Total 74 147 (73)
Operating Loss (160) (189) 29
Income of equity investments, net 3 - 3
Other, net - 9 (9)
Loss before interest and income taxes (157) (180) 23
Interest expense (106) (150) 44
Interest income 8 6 2
Loss from continuing operations
before income taxes (255) (324) 69
Income tax benefit (48) (111) 63
Loss from continuing operations (207) (213) 6
Income (loss) from discontinued
operations 49 (51) 100
Cumulative effect of accounting
change, net of tax (1) - (1)
Net Loss $(159) $(264) $105
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment - As Reported
(Millions of Dollars)
(Unaudited)
Twelve Months Ended
December 31, December 31,
2005 2004 Change
Retail Energy:
Revenues:
Revenues $7,045 $6,064 $981
Operating Expenses:
Purchased power, fuel and cost of
gas sold 6,351 5,335 1,016
Gross margin 694 729 (35)
Operation and maintenance 190 222 (32)
Selling and marketing 95 82 13
Bad debt expense 56 48 8
Contribution margin - Retail Energy 353 377 (24)
Wholesale Energy:
Revenues:
Revenues 3,301 2,374 927
Operating Expenses:
Purchased power, fuel and cost of
gas sold 2,630 1,569 1,061
Gross margin 671 805 (134)
Operation and maintenance 544 560 (16)
Bad debt expense 2 (2) 4
Contribution margin - Wholesale Energy 125 247 (122)
Other Operations:
Revenues:
Revenues 6 - 6
Operating Expenses:
Purchased power, fuel and cost of
gas sold (1) - (1)
Gross margin 7 - 7
Operation and maintenance 3 - 3
Contribution margin - Other Operations 4 - 4
Eliminations:
Revenues:
Revenues (625) (340) (285)
Operating Expenses:
Purchased power, fuel and cost of
gas sold (625) (340) (285)
Gross margin - - -
Consolidated:
Revenues:
Revenues 9,727 8,098 1,629
Operating Expenses:
Purchased power, fuel and cost of
gas sold 8,355 6,564 1,791
Gross margin 1,372 1,534 (162)
Operation and maintenance 737 782 (45)
Selling and marketing 95 82 13
Bad debt expense 58 46 12
Contribution margin - Consolidated 482 624 (142)
Other general and administrative 140 198 (58)
Western states and Cornerstone
settlements 359 - 359
Loss on sales of receivables - 34 (34)
Accrual for payment to CenterPoint
Energy, Inc. - 2 (2)
Gain on sale of counterparty claim - (30) 30
Gains on sales of assets and
emission allowances, net (168) (20) (148)
Depreciation and amortization 446 453 (7)
Total 777 637 140
Operating Loss (295) (13) (282)
Income (loss) of equity investments,
net 26 (9) 35
Other, net (23) 13 (36)
Loss before interest and income
taxes (292) (9) (283)
Interest expense (399) (418) 19
Interest income 23 35 (12)
Loss from continuing operations
before income taxes (668) (392) (276)
Income tax benefit (203) (116) (87)
Loss from continuing operations (465) (276) (189)
Income from discontinued operations 111 240 (129)
Cumulative effect of accounting
changes, net of tax (1) 7 (8)
Net Loss $(355) $(29) $(326)
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment - Adjusted
(Millions of Dollars)
(Unaudited)
Three Months Ended
December 31, December 31,
2005 2004 Change
Retail Energy:
Revenues:
Revenues $1,736 $1,471 $265
Operating Expenses:
Purchased power, fuel and cost of
gas sold 1,631 1,289 342
Gross margin 105 182 (77)
Operation and maintenance 48 49 (1)
Selling and marketing 29 20 9
Bad debt expense 14 8 6
Contribution margin - Retail Energy 14 105 (91)
Wholesale Energy:
Revenues:
Revenues 936 634 302
Operating Expenses:
Purchased power, fuel and cost of
gas sold 819 458 361
Gross margin 117 176 (59)
Operation and maintenance 132 145 (13)
Bad debt expense - 1 (1)
Contribution margin - Wholesale Energy (15) 30 (45)
Other Operations:
Revenues:
Revenues 2 - 2
Operating Expenses:
Purchased power, fuel and cost of
gas sold - - -
Gross margin 2 - 2
Operation and maintenance 1 - 1
Contribution margin - Other
Operations 1 - 1
Eliminations:
Revenues:
Revenues (182) (96) (86)
Operating Expenses:
Purchased power, fuel and cost of
gas sold (182) (96) (86)
Gross margin - - -
Consolidated:
Revenues:
Revenues 2,492 2,009 483
Operating Expenses:
Purchased power, fuel and cost of
gas sold 2,268 1,651 617
Gross margin 224 358 (134)
Operation and maintenance 181 194 (13)
Selling and marketing 29 20 9
Bad debt expense 14 9 5
Contribution margin - Consolidated - 135 (135)
Other general and administrative 8 45 (37)
Gains on sales of assets and
emission allowances, net (52) (5) (47)
Depreciation and amortization 110 104 6
Total 66 144 (78)
Operating Loss (66) (9) (57)
Income of equity investments, net 3 - 3
Other, net - - -
Loss before interest and income taxes (63) (9) (54)
Interest expense (106) (150) 44
Interest income 8 3 5
Loss from continuing operations
before income taxes (161) (156) (5)
Income tax benefit (12) (47) 35
Loss from continuing operations (149) (109) (40)
Income (loss) from discontinued
operations 49 (51) 100
Cumulative effect of accounting
change, net of tax (1) - (1)
Net Loss $(101) $(160) $59
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment - Adjusted
(Millions of Dollars)
(Unaudited)
Twelve Months Ended
December 31, December 31,
2005 2004 Change
Retail Energy:
Revenues:
Revenues $7,045 $6,085 $960
Operating Expenses:
Purchased power, fuel and cost of
gas sold 6,282 5,063 1,219
Gross margin 763 1,022 (259)
Operation and maintenance 190 216 (26)
Selling and marketing 95 80 15
Bad debt expense 56 48 8
Contribution margin - Retail Energy 422 678 (256)
Wholesale Energy:
Revenues:
Revenues 3,503 2,429 1,074
Operating Expenses:
Purchased power, fuel and cost of
gas sold 2,725 1,649 1,076
Gross margin 778 780 (2)
Operation and maintenance 544 549 (5)
Bad debt expense 2 (2) 4
Contribution margin - Wholesale Energy 232 233 (1)
Other Operations:
Revenues:
Revenues 6 - 6
Operating Expenses:
Purchased power, fuel and cost of
gas sold (1) - (1)
Gross margin 7 - 7
Operation and maintenance 3 - 3
Contribution margin - Other
Operations 4 - 4
Eliminations:
Revenues:
Revenues (625) (340) (285)
Operating Expenses:
Purchased power, fuel and cost of
gas sold (625) (340) (285)
Gross margin - - -
Consolidated:
Revenues:
Revenues 9,929 8,174 1,755
Operating Expenses:
Purchased power, fuel and cost of
gas sold 8,381 6,372 2,009
Gross margin 1,548 1,802 (254)
Operation and maintenance 737 765 (28)
Selling and marketing 95 80 15
Bad debt expense 58 46 12
Contribution margin - Consolidated 658 911 (253)
Other general and administrative 132 173 (41)
Loss on sales of receivables - 34 (34)
Gains on sales of assets and
emission allowances, net (168) (20) (148)
Depreciation and amortization 446 425 21
Total 410 612 (202)
Operating income 248 299 (51)
Income (loss) of equity investments,
net 26 (9) 35
Other, net (23) 4 (27)
Earnings before interest and income
taxes 251 294 (43)
Interest expense (399) (418) 19
Interest income 17 19 (2)
Loss from continuing operations
before income taxes (131) (105) (26)
Income tax benefit (1) (7) 6
Loss from continuing operations (130) (98) (32)
Income from discontinued operations 111 240 (129)
Cumulative effect of accounting
changes, net of tax (1) 7 (8)
Net Income (loss) $(20) $149 $(169)
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment - Adjustments
(Millions of Dollars)
(Unaudited)
Three Months Ended
December 31, December 31,
2005 2004 Change
Retail Energy:
Gross Margin (1) Adjustments:
Gains recorded prior to 2003 to be
realized/collected in current period $- $5 $(5)
Unrealized (gains)/losses on energy
derivatives 150 129 21
Total gross margin adjustments 150 134 16
Operating Expenses Adjustments:
Operation and maintenance adjustment
- severance and restructuring - (1) 1
Total operating expenses adjustments - (1) 1
Wholesale Energy:
Gross Margin (1) Adjustments:
Changes in California-related
receivables and reserves - 33 (33)
Unrealized (gains)/losses on energy
derivatives (64) 9 (73)
Total gross margin adjustments (64) 42 (106)
Consolidated:
Selling, general and administrative
adjustment - severance and
restructuring - (1) 1
Selling, general and administrative
adjustment - restructuring costs
associated with lease on corporate
headquarters - (2) 2
Western states and Cornerstone
settlements (8) - (8)
Interest income adjustment -
California-related interest income - (3) 3
Gain on sale of non-marketable
investment - ICE - 9 (9)
Income tax expense - tax adjustments, net 36 64 (28)
(1) Revenues less purchased power, fuel and cost of gas sold.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment - Adjustments
(Millions of Dollars)
(Unaudited)
Twelve Months Ended
December 31, December 31,
2005 2004 Change
Retail Energy:
Gross Margin (1) Adjustments:
Gains recorded prior to 2003 to be
realized/collected in current period $- $21 $(21)
Unrealized losses on energy
derivatives 69 272 (203)
Total gross margin adjustments 69 293 (224)
Operating Expenses Adjustments:
Operation and maintenance adjustment
- severance and restructuring - (6) 6
Selling and marketing adjustment -
severance and restructuring - (2) 2
Total operating expenses adjustments - (8) 8
Wholesale Energy:
Gross Margin (1) Adjustments:
Changes in California-related
receivables and reserves (1) 11 (12)
Adjustment to October 2003 FERC
settlement - 12 (12)
Unrealized (gains)/losses on energy
derivatives 108 (48) 156
Total gross margin adjustments 107 (25) 132
Operating Expenses Adjustments:
Operation and maintenance adjustment
- severance and restructuring - (11) 11
Consolidated:
Selling, general and administrative
adjustment - severance and
restructuring - (12) 12
Selling, general and administrative
adjustment - settlement of
shareholder
class action lawsuits (8) - (8)
Selling, general and administrative
adjustment - restructuring costs
associated
with lease on corporate headquarters - (13) 13
Western states and Cornerstone
settlements (359) - (359)
Accrual for payment to CenterPoint
Energy, Inc. adjustment - (2) 2
Gain on sale of counterparty claim - 30 (30)
Depreciation and amortization
adjustment - accelerated
depreciation on retired generation
assets - (12) 12
Depreciation and amortization
adjustment - equipment impairment
related to turbines and generators - (16) 16
Interest income adjustment -
California-related interest income (6) (16) 10
Gain on sale of non-marketable
investment - ICE - 9 (9)
Income tax expense - tax adjustments,
net 202 109 93
(1) Revenues less purchased power, fuel and cost of gas sold.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Open EBITDA Reconciliations
(Millions of Dollars)
(Unaudited)
Three Months Ended
December 31, December 31,
2005 2004
Adjusted loss before interest and
income taxes $(63) $(9)
Adjusted depreciation and amortization 110 104
Adjusted EBITDA 47 95
Gains on sales of assets and emission
allowances, net (52) (5)
Historical wholesale hedges (included
in wholesale gross margin):
Power (closed) 47 -
Fuel (28) (50)
Tolling/other 186 10
205 (a) (40) (b)
Open EBITDA $200 $50
Loss from continuing operations before
income taxes $(255) (324)
Adjustments:
General and administrative adjustment
- severance and restructuring - 4
Western states and Cornerstone
settlements 8 -
Interest income adjustment -
California-related interest income - (3)
Unrealized (gains)/losses on energy
derivatives 86 138
Changes in California-related
receivables and reserves - 33
Gain on sale of non-marketable
investment - ICE - (9)
Gains recorded prior to 2003 to be
realized/collected in current period - 5
Adjusted depreciation and amortization 110 104
Adjusted interest expense, net 98 147
Adjusted EBITDA 47 95
Gains on sales of assets, net (52) (5)
Historical wholesale hedges (included
in wholesale gross margin):
Power (closed) 47 -
Fuel (28) (50)
Tolling/other 186 10
205 (a) (40) (b)
Open EBITDA $200 $50
(a) Open wholesale gross margin is $322 million ($117 million of adjusted
wholesale gross margin excluding historical hedges of $205 million).
(b) Open wholesale gross margin is $136 million ($176 million of adjusted
wholesale gross margin excluding historical hedges of $(40) million).
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Open EBITDA Reconciliations
(Millions of Dollars)
(Unaudited)
Twelve Months Ended
December 31, 2005
Adjusted earnings before interest and income taxes $251
Depreciation and amortization 446
Adjusted EBITDA 697
Gains on sales of assets and emission allowances, net (168)
Gain on sale of equity method investment (25)
Historical wholesale hedges (included
in wholesale gross margin):
Power (closed) 441
Fuel (110)
Tolling/other 84
415 (a)
Open EBITDA $919
Loss from continuing operations before income taxes $(668)
Adjustments:
General and administrative adjustment
- settlement of shareholder class action lawsuits 8
General and administrative adjustment
- severance and restructuring -
Western states and Cornerstone settlements 359
Interest income adjustment - California-related
interest income (6)
Unrealized (gains)/losses on energy derivatives 177
Changes in California-related receivables and reserves (1)
Gain on sale of non-marketable investment - ICE -
Gains recorded prior to 2003 to be realized/collected -
in current period -
Adjustment to October 2003 FERC settlement
Gain on sale of counterparty claim -
Accrual for payment to CenterPoint
Energy, Inc. adjustment -
Depreciation and amortization adjustment - accelerated
depreciation on retired generation assets -
Depreciation and amortization adjustment - equipment
impairment related to turbines and generators -
Depreciation and amortization 446
Adjusted interest expense, net 382
Adjusted EBITDA 697
Gains on sales of assets, net (168)
Gain on sale of equity method investment (25)
Historical wholesale hedges (included
in wholesale gross margin):
Power (closed) 441
Fuel (110)
Tolling/other 84
415 (a)
Open EBITDA $919
(a) Open wholesale gross margin is $1,193 million ($778 million of
adjusted wholesale gross margin excluding historical hedges of $415
million).
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Diluted EPS from Continuing Operations Reconciliation
(Dollars per diluted share)
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
2005 2004 2005 2004
Diluted:
Net Loss (per GAAP) $(0.52) $(0.88) $(1.17) $(0.10)
Cumulative effect of accounting
changes, net of tax - - - (0.02)
(Income) loss from discontinued
operations (0.16) 0.17 (0.37) (0.81)
Loss from continuing operations (on
GAAP basis) (0.68) (0.71) (1.54) (0.93)
Adjustments:
Gains recorded prior to 2003 to be
realized/collected in current period - 0.01 - 0.04
Unrealized losses on energy
derivatives 0.17 0.30 0.37 0.47
Changes in California-related
receivables and reserves (including
interest) - 0.06 (0.02) (0.02)
Adjustment to October 2003 FERC
settlement - - - 0.03
Severance and restructuring - - - 0.07
Restructuring costs associated with
lease on corporate headquarters - - - 0.03
Settlement of shareholder class
action lawsuits - - 0.02 -
Western states and Cornerstone
settlements 0.02 - 0.74 -
Gain on sale of counterparty claim - - - (0.06)
Accelerated depreciation on retired
generation assets - - - 0.03
Equipment impairment related to
turbines and generators - - - 0.03
Gain on sale of non-marketable
investment - ICE - (0.02) - (0.02)
Adjusted loss from continuing
operations $(0.49) $(0.36) $(0.43) $(0.33)
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Thousands of Dollars)
(Unaudited)
December 31, December 31,
2005 2004
ASSETS
Current Assets:
Cash and cash equivalents $88,397 $105,054
Restricted cash 26,906 15,610
Accounts and notes receivable,
principally customer, net 1,171,673 1,071,312
Inventory 299,099 245,682
Derivative assets 725,964 305,924
Margin deposits on energy trading
and hedging activities 1,716,035 505,547
Other current assets 478,045 304,446
Current assets of discontinued
operations 203,332 104,276
Total current assets 4,709,451 2,657,851
Property, Plant and Equipment, net 5,934,060 6,437,761
Other Assets:
Goodwill 386,594 440,534
Other intangibles, net 510,582 540,583
Net California receivables subject
to refund - 200,086
Equity investments 29,524 83,819
Derivative assets 527,799 272,254
Restricted cash - 25,547
Other long-term assets 565,000 502,830
Long-term assets of discontinued
operations 880,796 1,032,759
Total other assets 2,900,295 3,098,412
Total Assets $13,543,806 $12,194,024
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt
and short-term borrowings $789,325 $618,854
Accounts payable, principally trade 875,965 566,104
Derivative liabilities 1,219,954 401,881
Margin deposits on energy trading
and hedging activities 15,588 19,040
Other current liabilities 402,942 463,528
Current liabilities of
discontinued operations 96,456 29,184
Total current liabilities 3,400,230 2,098,591
Other Liabilities:
Derivative liabilities 812,695 311,222
Other long-term liabilities 403,083 616,575
Long-term liabilities of discontinued
operations 779,678 842,425
Total other liabilities 1,995,456 1,770,222
Long-term Debt 4,317,427 3,938,857
Commitments and Contingencies
Total Stockholders' Equity 3,830,693 4,386,354
Total Liabilities and
Stockholders' Equity $13,543,806 $12,194,024
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Thousands of Dollars)
(Unaudited)
Twelve Months Ended December 31,
2005 2004
Cash Flows from Operating Activities:
Net loss $(354,556) $(29,370)
Income from discontinued operations (110,799) (239,800)
Net loss from continuing operations
and cumulative effect of accounting
changes (465,355) (269,170)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Cumulative effect of accounting
changes 608 (7,290)
Depreciation and amortization 445,871 453,042
Deferred income taxes (228,992) (108,688)
Net unrealized losses on energy
derivatives 177,235 224,402
Amortization of deferred financing
costs 15,110 77,881
Gains on sales of assets and
emission allowances, net (168,114) (19,834)
Western states and Cornerstone
settlements 359,436 -
(Income) loss of equity investments, net (25,458) 9,478
Other, net 27,498 (5,458)
Changes in other assets and liabilities:
Accounts and notes receivable and
unbilled revenue, net (109,736) (59,723)
Receivables facility proceeds, net - 232,000
Inventory (42,253) (14,744)
Margin deposits on energy trading and
hedging activities, net (1,213,940) (450,851)
Net derivative assets and liabilities 10,978 12,547
Accounts payable 133,466 59,233
Payment to CenterPoint Energy, Inc. - (176,600)
Other current assets 33,071 (37,399)
Other assets (32,605) (5,562)
Taxes payable/ receivable 3,053 47,652
Other current liabilities (34,479) 1,815
Other liabilities 4,495 42,617
Net cash provided by (used in)
continuing operations from operating
activities (1,110,111) 5,348
Net cash provided by discontinued
operations from operating activities 192,948 100,165
Net cash provided by (used in)
operating activities (917,163) 105,513
Cash Flows from Investing Activities:
Capital expenditures (82,296) (159,671)
Proceeds from sales of assets, net 149,345 11,325
Proceeds from sales of emission
allowances 234,421 59,662
Purchases of emission allowances (145,769) (124,241)
Restricted cash 14,251 178,885
Other, net 5,500 16,207
Net cash provided by (used in)
continuing operations from investing
activities 175,452 (17,833)
Net cash provided by discontinued
operations from investing activities 130,700 919,043
Net cash provided by investing
activities 306,152 901,210
Cash Flows from Financing Activities:
Proceeds from long-term debt 299,000 1,512,000
Payments of long-term debt (148,333) (1,597,568)
Increase (decrease) in short-term
borrowings and revolving credit
facilities, net 407,000 (108,350)
Proceeds from issuances of stock 37,885 24,618
Payments of financing costs (1,198) (71,884)
Other, net - 9,156
Net cash provided by (used in)
continuing operations from financing
activities 594,354 (232,028)
Net cash used in discontinued
operations from financing activities - (815,885)
Net cash provided by (used in)
financing activities 594,354 (1,047,913)
Net Change in Cash and Cash Equivalents (16,657) (41,190)
Cash and Cash Equivalents at
Beginning of Period 105,054 146,244
Cash and Cash Equivalents at End of Period $88,397 $105,054
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Retail Operational Data
(Unaudited)
Retail Energy Revenues:
Three Months Twelve Months
Ended Ended
December 31, December 31,
2005 2004 2005 2004
(in millions) (in millions)
Retail energy revenues from
end-use retail customers:
Texas:
Residential and small business $906 $766 $4,005 $3,531
Large commercial, industrial
and governmental/institutional 588 521 2,185 1,957
Outside of Texas:
Commercial, industrial and
governmental/institutional 115 67 404 204
Total 1,609 1,354 6,594 5,692
Retail Energy revenues from
resales of purchased power 121 133 474 374
and other hedging activities
Market usage adjustments 6 (21) (23) (2)
Total retail energy revenues $1,736 $1,466 $7,045 $6,064
Retail Energy Operating Data:
Three Months Ended Twelve Months
December 31, Ended December 31,
2005 2004 2005 2004
(gigawatt hours) (gigawatt hours)
Electricity Sales to End-Use
Retail Customers:
Texas:
Residential:
Price-to-beat 3,606 3,958 17,981 19,315
Non price-to-beat 1,524 1,184 6,470 4,516
Total residential 5,130 5,142 24,451 23,831
Small business:
Price-to-beat 1,208 1,495 5,183 7,166
Non price-to-beat 722 488 2,882 1,924
Total small business 1,930 1,983 8,065 9,090
Large commercial, industrial
and governmental/
institutional (1) 6,488 7,889 28,604 31,278
Total Texas 13,548 15,014 61,120 64,199
Outside of Texas:
Commercial, industrial and
governmental/institutional 1,634 1,187 6,155 3,635
Total Outside of Texas 1,634 1,187 6,155 3,635
Total 15,182 16,201 67,275 67,834
December 31, December 31,
2005 2004
(in thousands, metered locations)
Retail Customers:
Texas:
Residential:
Price-to-beat 1,191 1,313
Non price-to-beat 483 334
Total residential 1,674 1,647
Small business:
Price-to-beat 137 163
Non price-to-beat 66 30
Total small business 203 193
Large commercial, industrial and
governmental/institutional (1) 34 40
Total Texas 1,911 1,880
Outside of Texas:
Commercial, industrial and
governmental/institutional 2 1
Total Outside of Texas 2 1
Total 1,913 1,881
Three Months Twelve Months
Ended Ended
December 31, December 31,
2005 2004 2005 2004
(in thousands, (in thousands,
metered metered
locations) locations)
Weighted Average Retail Customer
Count:
Texas:
Residential:
Price-to-beat 1,194 1,326 1,250 1,360
Non price-to-beat 461 319 396 271
Total residential 1,655 1,645 1,646 1,631
Small business:
Price-to-beat 137 165 147 174
Non price-to-beat 57 29 43 26
Total small business 194 194 190 200
Large commercial, industrial and
governmental/institutional (1) 33 40 36 40
Total Texas 1,882 1,879 1,872 1,871
Outside of Texas:
Commercial, industrial and
governmental/institutional 2 1 2 1
Total Outside of Texas 2 1 2 1
Total 1,884 1,880 1,874 1,872
(1) These volumes include customers of the 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, 2004.
Reliant Energy, Inc. and Subsidiaries
Wholesale Operational Data
(Unaudited)
Wholesale Energy
Gross Margin: Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 Change 2005 2004 Change
(in millions) (in millions)
West $40 $45 $(5) $176 $161 $15
PJM 66 86 (20) 384 440 (56)
Southeast (3) 2 (5) 27 15 12
MISO 33 30 3 185 106 79
ERCOT 19 16 3 76 70 6
East gas transport (33) - (33) (29) (2) (27)
West gas transport (4) (2) (2) (26) (7) (19)
Other:
Billings to Texas Genco
for support costs - 1 (1) - 15 (15)
Other (1) (2) 1 (15) (18) 3
Adjusted Plant Gross Margin 117 176 (59) 778 780 (2)
California-related
receivables and reserves - (33) 33 1 (11) 12
Adjustment to October 2003
FERC settlement - - - - (12) 12
Unrealized gains/losses on
energy derivatives (1) 64 (9) 73 (108) 48 (156)
Total Wholesale Energy
Gross Margin $181 $134 $47 $671 $805 $(134)
Wholesale Power Sales (2):
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 Change 2005 2004 Change
(gigawatt hours) (gigawatt hours)
Net power generation
volumes 8,596 7,799 797 33,709 32,562 1,147
Power purchase volumes 736 278 458 1,838 1,840 (2)
Power sales volumes 9,332 8,077 1,255 35,547 34,402 1,145
(1) Includes ineffectiveness and derivatives not designated as hedges.
(2) These amounts include physically delivered volumes, hedge activity
related to our power generation portfolio and volumes associated
with our legacy trading activities. These amounts exclude (a)
volumes associated with our discontinued operations, (b) generation
from facilities where the generation is sold by a third party
pursuant to a tolling agreement, (c) generation from facilities
that are accounted for as an equity method investment and (d)
physical transactions that are settled prior to delivery.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Net Generation Volumes (1) (2)
(MWh)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
By region: 2005 2004 2005 2004
MISO 1,390,934 1,273,307 5,953,391 5,231,314
PJM 4,851,742 4,190,744 19,649,945 16,710,950
Southeast 275,180 363,836 1,907,348 2,198,244
West 1,134,179 2,006,245 5,653,446 7,437,753
ERCOT 1,310,296 1,284,026 5,241,421 5,468,668
Total 8,962,331 9,118,158 38,405,551 37,046,929
Three Months Ended Twelve Months Ended
December 31, December 31,
By asset type: 2005 2004 2005 2004
Base load 8,119,561 7,876,021 33,300,879 30,984,940
Intermediate 683,763 1,087,164 3,609,403 4,922,200
Peaking 159,007 154,973 1,495,269 1,139,789
Total 8,962,331 9,118,158 38,405,551 37,046,929
(1) These amounts exclude volumes associated with our discontinued
operations.
(2) These amounts include (a) physically delivered volumes, (b) hedge
activity related to our power generation portfolio, (c) generation of
325 GWh and 682 GWh for the three months ended December 31, 2005 and
2004, respectively, and 3,647 GWh and 2,388 GWh for the twelve months
ended December 31, 2005 and 2004, respectively, from facilities where
the generation is sold by a third-party pursuant to a tolling
agreement and (d) generation from facilities that are accounted for as
an equity method investment.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
MISO Asset Summary
(Unaudited)
Summer/ Q4 net
Winter Heat capacity
Average Rate Q4 net generation factor (2)
Capacity (MMBtu/ volume (1) (MWh) (MWh)
Unit Name (MW) MWh) 2005 2004 2005 2004
Base Load
Avon Lake 7 & 9 721 9.8 822,843 822,136 52% 52%
New Castle 3-5 328 10.7 294,517 203,015 41% 28%
Niles 1-2 208 10.5 273,740 247,749 60% 54%
1,257 1,391,100 1,272,900 50% 46%
Peaking
Avon Lake 10 24 17.4 (92) 462 0% 1%
New Castle A-B 6 10.0 6 5 0% 0%
Niles A 28 21.3 (80) (60) 0% 0%
Shelby 1-8 356 9.8 - - 0% 0%
414 (166) 407 0% 0%
MISO Total 1,671 1,390,934 1,273,307 38% 35%
Summer/ Q4 YTD net
Winter Heat capacity
Average Rate Q4 YTD net generation factor (2)
Unit Name Capacity (MMBtu/ volume (1) (MWh) (MWh)
(MW) MWh) 2005 2004 2005 2004
Base Load
Avon Lake 7 & 9 721 9.8 3,541,512 2,736,654 56% 43%
New Castle 3-5 328 10.7 1,314,907 1,496,868 46% 52%
Niles 1-2 208 10.5 1,015,015 985,666 56% 54%
1,257 5,871,434 5,219,188 53% 47%
Peaking
Avon Lake 10 24 17.4 918 2,940 0% 1%
New Castle A-B 6 10.0 49 73 0% 0%
Niles A 28 21.3 (7) (176) 0% 0%
Shelby 1-8 356 9.8 80,997 9,289 3% 0%
414 81,957 12,126 2% 0%
MISO Total 1,671 5,953,391 5,231,314 41% 36%
(1) Represents net generation assets only.
(2) Capacity factor is the ratio of the actual net electricity generated
to the energy that could have been generated at continuous full-power
operation during the period.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
PJM Asset Summary
(Unaudited)
Summer/ Q4 net
Winter Heat capacity
Average Rate Q4 net generation factor (2)
Capacity (MMBtu/ volume (1) (MWh) (MWh)
Unit Name (MW) MWh) 2005 2004 2005 2004
Base Load
Conemaugh 1-2 (16%) 280 9.4 469,051 531,955 76% 86%
Cheswick 1 580 10.0 796,127 893,680 62% 70%
Deep Creek 1-2 (3) - - 8,409 0% 20%
Elrama 1-4 465 11.3 571,907 394,107 56% 38%
Keystone 1-2 (16%) 282 9.5 598,416 461,052 96% 74%
Piney Station 1-3 (3) - - 16,679 0% 27%
Portland 1&2 400 10.1 567,222 406,181 64% 46%
Seward 1 520 9.7 525,477 472,936 46% 41%
Shawville 1-4 566 10.3 846,928 796,249 68% 64%
Titus 1-3 246 10.8 341,079 165,520 63% 30%
3,339 4,716,207 4,146,768 64% 55%
Intermediate
Brunot Island CCGT 293 9.8 3,038 (1,964) 0% 0%
Gilbert CCGT 336 9.5 (830) 3,603 0% 0%
Gilbert 9 168 11.1 6,350 (389) 2% 0%
Hunterstown CCGT 839 7.0 93,786 16,602 5% 1%
Portland 5 145 10.1 16,461 6,693 5% 2%
1,781 118,805 24,545 3% 1%
Peaking
Aurora 1-10 937 10.5 4,188 644 0% 0%
Blossburg 1 23 14.6 1,442 638 3% 1%
Brunot Island 1A-1C 54 13.6 (243) (63) 0% 0%
Ceredo 1-6 (4) - 12.1 - 505 - 0%
Gilbert 1-4 111 15.1 1,122 (32) 0% 0%
Glen Gardner 1-8 184 14.6 1,550 (211) 0% 0%
Hamilton 1 23 14.8 170 103 0% 0%
Hunterstown 1-3 71 14.8 1,553 227 1% 0%
Mountain 1-2 47 14.3 2,400 401 2% 0%
Orrtanna 1 23 14.4 770 - 2% 0%
Portland 3-4 40 15.1 413 149 0% 0%
Sayreville A-D 264 13.8 1,089 12,249 0% 2%
Shawnee 1 23 14.0 2 - 0% 0%
Shawville 5-7 6 10.2 (19) (26) 0% 0%
Tolna 1-2 47 14.2 169 143 0% 0%
Titus 4-5 35 17.4 183 99 0% 0%
Warren 3 (5) 68 12.8 (110) (114) 0% 0%
Werner 1-4 252 13.8 2,031 4,564 0% 1%
Keystone 3-6 2 10.3 6 142 0% 3%
Conemaugh A-D 2 9.7 14 13 0% 0%
2,212 16,730 19,431 0% 0%
PJM Total 7,332 4,851,742 4,190,744 30% 24%
(1) Represents net generation assets only.
(2) Capacity factor is the ratio of the actual net electricity generated
to the energy that could have been generated at continuous full-power
operation during the period.
(3) Deep Creek 1-2 and Piney Station 1-3 were sold in April 2005.
(4) Ceredo was sold in December 2005. Prior to January 1, 2005, Ceredo
did not qualify for discontinued operations.
(5) Warren 3 was mothballed in October 2004.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
PJM Asset Summary
(Unaudited)
Summer/ Q4 YTD net
Winter Heat capacity
Average Rate Q4 YTD net generation factor (2)
Capacity (MMBtu/ volume (1) (MWh) (MWh)
Unit Name (MW) MWh) 2005 2004 2005 2004
Base Load
Conemaugh 1-2 (16%) 280 9.4 2,128,927 2,142,413 87% 87%
Cheswick 1 580 10.0 2,889,720 3,174,840 57% 62%
Deep Creek 1-2 (3) - 13,776 33,504 17% 20%
Elrama 1-4 465 11.3 1,592,313 1,887,544 39% 46%
Keystone 1-2 (16%) 282 9.5 2,245,923 2,047,909 91% 83%
Piney Station 1-3 (3) - 28,569 75,851 23% 31%
Portland 1&2 400 10.1 2,169,118 2,042,007 62% 58%
Seward 1 520 9.7 2,774,658 472,936 61% 41%
Shawville 1-4 566 10.3 3,198,870 3,119,613 65% 63%
Titus 1-3 246 10.8 1,273,181 1,122,860 59% 52%
3,339 18,315,055 16,119,477 62% 59%
Intermediate
Brunot Island CCGT 293 9.8 8,037 3,229 0% 0%
Gilbert CCGT 336 9.5 149,760 61,791 5% 2%
Gilbert 9 168 11.1 20,653 11,542 1% 1%
Hunterstown CCGT 839 7.0 721,781 283,944 10% 4%
Sayreville 4-5 (4) - - - 388 0% 0%
Portland 5 145 10.1 56,238 38,808 4% 3%
1,781 956,469 399,702 6% 3%
Peaking
Aurora 1-10 937 10.5 309,742 52,819 4% 1%
Blossburg 1 23 14.6 4,274 1,982 2% 1%
Brunot Island 1A-1C 54 13.6 (251) 2,417 0% 1%
Ceredo 1-6 (5) - 12.1 - 1,550 - 0%
Gilbert 1-4 111 15.1 3,428 1,044 0% 0%
Glen Gardner 1-8 184 14.6 8,611 4,636 1% 0%
Hamilton 1 23 14.8 1,434 2,774 1% 1%
Hunterstown 1-3 71 14.8 8,005 11,674 1% 2%
Mountain 1-2 47 14.3 8,214 3,084 2% 1%
Orrtanna 1 23 14.4 2,368 1,551 1% 1%
Portland 3-4 40 15.1 1,518 1,398 0% 0%
Sayreville A-D 264 13.8 10,320 53,497 0% 2%
Shawnee 1 23 14.0 262 259 0% 0%
Shawville 5-7 6 10.2 (26) (74) 0% 0%
Tolna 1-2 47 14.2 10,615 5,336 3% 1%
Titus 4-5 35 17.4 798 195 0% 0%
Wayne 1 (6) - - - 486 0% 0%
Warren 3 (7) 68 12.8 (444) 1,029 0% 0%
Werner 1-4 252 13.8 9,267 45,607 0% 2%
Keystone 3-6 2 10.3 250 439 1% 2%
Conemaugh A-D 2 9.7 36 68 0% 0%
2,212 378,421 191,771 2% 1%
PJM Total 7,332 19,649,945 16,710,950 30% 26%
(1) Represents net generation assets only.
(2) Capacity factor is the ratio of the actual net electricity generated
to the energy that could have been generated at continuous full-power
operation during the period.
(3) Deep Creek 1-2 and Piney Station 1-3 were sold in April 2005.
(4) Sayreville 4-5 of 232 MW was retired in February 2004.
(5) Ceredo was sold in December 2005. Prior to January 1, 2005, Ceredo
did not qualify for discontinued operations.
(6) Wayne 1 of 66 MW was retired in May 2004.
(7) Warren 3 was mothballed in October 2004.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Southeast Asset Summary
(Unaudited)
Summer/ Q4 net
Winter Heat capacity
Average Rate Q4 net generation factor (2)
Capacity (MMBtu/ volume (1) (MWh) (MWh)
Unit Name (MW) MWh) 2005 2004 2005 2004
Base Load
Sabine 54 10.0 21,033 70,320 18% 59%
Intermediate
Indian River 1-3 587 10.5 112,117 158,381 9% 12%
Choctaw (3) 800 6.9 - - 0% 0%
1,387 112,117 158,381 4% 5%
Peaking
Osceola 1-3 470 11.0 64,219 56,842 6% 5%
Shady Hills 474 10.8 48,988 62,396 5% 6%
Vandolah 630 10.8 28,823 15,897 2% 1%
1,574 142,030 135,135 4% 4%
Southeast Total 3,015 275,180 363,836 4% 5%
Q4 YTD net
capacity
Q4 YTD net generation factor (2)
volume (1) (MWh) (MWh)
Unit Name 2005 2004 2005 2004
Base Load
Sabine 54 10.0 215,273 338,739 46% 71%
Intermediate
Indian River 1-3 587 10.5 659,772 928,701 13% 18%
Choctaw (3) 800 6.9 - (5,088) 0% 0%
1,387 659,772 923,613 5% 8%
Peaking
Osceola 1-3 470 11.0 410,868 410,597 10% 10%
Shady Hills 474 10.8 331,611 345,283 8% 8%
Vandolah 630 10.8 289,824 180,012 5% 3%
1,574 1,032,303 935,892 7% 7%
Southeast Total 3,015 1,907,348 2,198,244 7% 8%
(1) Represents net generation assets only.
(2) Capacity factor is the ratio of the actual net electricity generated
to the energy that could have been generated at continuous full-power
operation during the period.
(3) Choctaw was mothballed in May 2004.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
West Asset Summary
(Unaudited)
Summer/Winter
Q4 net
capacity
Heat factor
Average Rate (1) Q4 net generation (1) (3)
Capacity (MMBtu/ volume (1) (2) (MWh) (MWh)
Unit Name (1) (MW) MWh) 2005 2004 2005 2004
Base Load
Bighorn CCGT (4) 598 7.2 680,925 597,785 52% 45%
El Dorado (5) - 7.2 - 504,222 0% 98%
598 680,925 1,102,007 52% 60%
Intermediate
Coolwater 1-2 146 10.5 2,732 (265) 1% 0%
Coolwater 3-4 462 10.0 87,087 118,409 9% 12%
Etiwanda 3-4 640 10.0 227,429 8,309 16% 1%
Mandalay 1-2 430 9.5 108,476 151,382 11% 16%
Ormond Beach 1-2 1,516 9.6 27,117 626,403 1% 19%
3,194 452,841 904,238 6% 13%
Peaking
Ellwood 54 13.3 225 - 0% 0%
Mandalay 3 130 15.8 188 - 0% 0%
184 413 - 0% 0%
West Total 3,976 1,134,179 2,006,245 13% 22%
Q4 YTD net
capacity
factor
Q4 YTD net generation (1) (3)
volume (1) (2) (MWh) (MWh)
Unit Name 2005 2004 2005 2004
Base Load
Bighorn CCGT (4) 598 7.2 2,946,536 2,337,758 56% 49%
El Dorado (5) - 7.2 711,160 1,501,110 70% 73%
598 3,657,696 3,838,868 61% 62%
Intermediate
Coolwater 1-2 146 10.5 29,273 17,878 2% 1%
Coolwater 3-4 462 10.0 364,894 448,872 9% 11%
Etiwanda 3-4 640 10.0 725,252 212,821 13% 4%
Mandalay 1-2 430 9.5 349,027 670,671 9% 18%
Ormond Beach 1-2 1,516 9.6 524,716 2,248,643 4% 17%
3,194 1,993,162 3,598,885 7% 13%
Peaking
Ellwood 54 13.3 1,083 - 0% 0%
Mandalay 3 130 15.8 1,505 - 0% 0%
184 2,588 - 0% 0%
West Total 3,976 5,653,446 7,437,753 14% 21%
(1) Excludes Etiwanda 5 of 118 MW, which was retired in January 2004.
Q4 YTD 2005 includes net generation from Ellwood and Mandalay 3
although the units were mothballed in November 2003 and not officially
returned to service until April 2005. The net generation from
Mandalay 3 and Ellwood was produced during the re-commissioning.
Etiwanda 3 and 4 were also mothballed in November 2003 and returned to
service in September 2004 and July 2004, respectively, under a
reliability-must-run contract with the California Independent System
Operator through the end of 2004.
(2) Represents net generation assets only.
(3) Capacity factor is the ratio of the actual net electricity generated
to the energy that could have been generated at continuous full-power
operation during the period.
(4) Bighorn CCGT began operations in February 2004.
(5) Sold our El Dorado investment in July 2005.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
ERCOT Asset Summary
(Unaudited)
Summer/ Q4 net
Winter Heat capacity
Average Rate Q4 net generation factor (2)
Capacity (MMBtu/ volume (1) (MWh) (MWh)
Unit Name (MW) MWh) 2005 2004 2005 2004
Base Load
Channelview 830 6.1 1,310,296 1,245,954 71% 68%
Landfill Gas (3) - 10.5 - 38,072 0% 66%
ERCOT Total 830 1,310,296 1,284,026 71% 68%
Q4 YTD net
capacity
Q4 YTD net generation factor (2)
volume (1) (MWh) (MWh)
Unit Name 2005 2004 2005 2004
Base Load
Channelview 830 6.1 5,159,871 5,318,253 71% 73%
Landfill Gas (3) - 10.5 81,550 150,415 48% 66%
ERCOT Total 830 5,241,421 5,468,668 70% 73%
(1) Represents net generation assets only.
(2) Capacity factor is the ratio of the actual net electricity generated
to the energy that could have been generated at continuous full-power
operation during the period.
(3) Landfill Gas assets were sold in July 2005.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
Reliant Energy, Inc. and Subsidiaries
Adjusted Net Debt - to - Adjusted EBITDA Ratio
(in millions, except ratio)
(Unaudited)
December 31, 2005
Debt:
Senior secured revolver $383
Senior secured term loans 552 (1)(2)
Senior secured notes 1,850
Convertible senior subordinated notes 275
Orion Power 12% notes (3) 448
PEDFA fixed-rate bonds for Seward
plant due 2036 500
Channelview 348
Receivables facility 450
Warrants (1)
Other (4) 1
REMA operating leases (off-balance sheet) 497 (5)
Total debt and debt equivalents (6) 5,303
Less:
Cash and cash equivalents (88)
Restricted cash (27)
Net margin deposits (1,700)
Adjusted Net Debt $3,488
Adjusted EBIT $251 (7)
Adjusted depreciation and amortization 446 (7)
Adjusted EBITDA 697 (7) (8)
REMA lease expense 60 (5) (7)
Total Adjusted EBITDA $757 (7) (8)
Ratio 4.6
(1) Excludes $638 million of debt related to NYC Discontinued Operations.
(2) Excludes an additional $300 million related to expected net cash
proceeds from the sale of our NYC assets, as we have agreed to utilize
all of the net unrestricted proceeds from the sale to pay down debt.
(3) Orion 12% notes includes purchase accounting adjustments of $48
million.
(4) Other subsidiary debt.
(5) For purposes of computing this ratio, the effects of these off-balance
sheet items are included.
(6) Debt equivalents include off-balance sheet REMA lease of $497 million.
(7) Represents amounts for the rolling four quarters ended December 31,
2005.
(8) Excludes Discontinued Operations:
(a) NYC adjusted EBITDA of $10 million, which includes $239 million
loss on disposition, and
(b) Ceredo adjusted EBITDA of $(27) million, which includes $27
million loss on disposition and
(c) European Energy adjusted EBITDA of $52 million.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2004.
SOURCE Reliant Energy, Inc.
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Related links:
http://www.reliant.com/corporate
CONTACT:
Dennis Barber, +1-713-497-3042, or Kevin
Kremke, +1-713-497-5468
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