Reflecting Significant Decline in Commodity Prices and Mild Weather
HOUSTON, March 20 /PRNewswire-FirstCall/ -- Reliant Energy, Inc. updated
its 2006 wholesale energy segment outlook to reflect the impact of a
significant decline in commodity prices and mild weather.
The revised outlook uses forward natural gas prices as of March 8, which
reflects a decline of approximately $3 per MMBtu from the previous outlook.
Additionally, temperatures in January and February were unseasonably warm in
the Northeast where many of the company's power plants are located.
Consistent with the sensitivities provided on Feb. 8, Reliant Energy's
open EBITDA (earnings before interest, income taxes, depreciation and
amortization) outlook for 2006 is $740 million. Adjusted EBITDA outlook for
2006 is $457 million. The 2006 outlook for loss from continuing operations
before income taxes is $89 million.
Adjusted and Open EBITDA
Outlook Reconciliation
($ millions) 2006
Loss from continuing operations before income taxes (a) ($89)
Delivery of product underlying the unrealized (gains)
losses on energy derivatives (212)
Depreciation and amortization 378
Interest expense, net 380
Adjusted EBITDA (a) $457
Historical wholesale hedges (b) 422
Gains on sales of emission allowances (a),(c) (139)
Open EBITDA (a) $740
(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 March 8, 2006.
(c) Sales as of February 28, 2006.
This press release includes Adjusted EBITDA and Open EBITDA which are
non-GAAP financial measures. A reconciliation of these financial measures and
the most directly comparable GAAP measures is included above. Additional
information regarding these measures, including a discussion of their
usefulness and purpose, is included in the Form 8-K filed on March 15, 2006.
A presentation providing additional detail underlying the 2006 outlook is
available at http://www.reliant.com/corporate (Investor and Media Center).
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 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.
SOURCE Reliant Energy, Inc.
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Related links:
http://www.reliant.com/corporate
CONTACT:
Dennis Barber, +1-713-497-3042, or Patricia
Hammond, +1-713-497-7723, both for Reliant Energy, Inc.
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