- Open and adjusted EBITDA consistent with outlook
- PJM 2008 auction results validate improving supply/demand fundamentals
- Increased 2008 and 2009 open EBITDA and free cash flow outlook
- Completed phase one of comprehensive refinancing plan
HOUSTON, Aug. 2 /PRNewswire-FirstCall/ -- Reliant Energy, Inc. reported
open EBITDA of $193 million for the second quarter of 2007, compared to
$258 million for the second quarter of 2006. Improved wholesale open
contribution margin due to higher energy margins was more than offset by
lower retail contribution margin. Retail contribution margin declined due
to lower unit gross margins and reduced volumes, primarily due to milder
weather. Adjusted EBITDA, which includes the effect of historical and
operational wholesale hedges and gains on sales of emission allowances, was
$165 million for the second quarter of 2007, compared to $174 million for
the second quarter of 2006.
"This quarter has been marked by significant progress in implementing
the strategic plan that we announced in March," said Mark Jacobs, president
and chief executive officer. "The completion of the first phase of our
comprehensive refinancing plan is a major step in creating the capital
structure to support our business objectives in the future. In addition,
results of the recently announced PJM capacity auction have reinforced our
view that tightening supply and demand fundamentals will continue to
improve the outlook for our wholesale business."
Open EBITDA was $307 million for the first six months of 2007 compared
to $303 million for the same period of 2006. Adjusted EBITDA was $246
million for the first six months of 2007 compared to $250 million for the
same period of 2006. During the first six months of 2007, the company
reported free cash flow used in continuing operations of $142 million,
compared to $116 million for the same period of 2006.
On a GAAP basis, the loss from continuing operations before income
taxes was $456 million for the second quarter of 2007, compared to income
from continuing operations before income taxes of $39 million for the same
period of 2006. The second quarter 2007 loss from continuing operations
before income taxes includes net unrealized losses from energy derivatives
of $326 million and a $71 million charge for debt extinguishment premium
and consent fees. Income from continuing operations before income taxes for
the second quarter of 2006 includes $52 million of net unrealized gains
from energy derivatives. Interest expense in the second quarter of 2007
includes the amortization of $42 million of deferred financing costs,
including $39 million related to the June refinancing, compared to $4
million for the same period of 2006.
On a GAAP basis, the loss from continuing operations before income
taxes for the first six months of 2007 was $44 million, compared to $42
million for the same period of 2006. The reported numbers include net gains
from unrealized energy derivatives of $196 million and $75 million,
respectively, for 2007 and 2006. The 2007 loss from continuing operations
before income taxes includes a $71 million charge for debt extinguishment
premium and consent fees and a $22 million charge for western states and
similar settlements. During the first half of 2007, the company reported
cash provided by continuing operations from operating activities of $24
million, compared to a $115 million use of cash in continuing operations
from operating activities for the same period of 2006.
OUTLOOK
Reliant Energy's outlook for open EBITDA is $1,012 million, $1,420
million and $1,494 million for the years ending December 31, 2007, 2008 and
2009, respectively. Adjusted EBITDA, which includes the impact of
historical and operational wholesale hedges and gains on the sales of
emission allowances, net is $897 million, $1,336 million and $1,417 million
for the same periods. The outlook for free cash flow provided by continuing
operations is $231 million, $595 million and $869 million for the years
ending December 31, 2007, 2008 and 2009, respectively.
This outlook is based on forward commodity prices as of June 22, 2007,
and assumptions and estimates by Reliant Energy.
Open EBITDA
Outlook Reconciliation
($ millions) 2007E 2008E 2009E
Income (loss) from continuing
operations before income taxes ($6) $540 $803
Unrealized (gains) losses on
energy derivatives 58 108 (15)
Western States and similar
settlements 22 --- ---
Debt extinguishment premium and
consent fees 73 --- ---
Depreciation and amortization 423 458 459
Interest expense, net * 327 230 170
Adjusted EBITDA $897 $1,336 $1,417
Historical and operational
wholesale hedges 117 84 77
Gains on sales of assets and
emission allowances, net (2) --- ---
Open EBITDA $1,012 $1,420 $1,494
* Reduced by $5, $20 and $37 million for 2007E, 2008E and 2009E,
respectively for capitalized interest. 2007E includes $39 million
amortization of deferred financing costs associated with completion of
phase one of comprehensive refinancing plan during the second quarter.
Free Cash Flow from Continuing Operations
Outlook Reconciliation
($ millions) 2007E 2008E 2009E
Operating cash flow from
continuing operations * $728 $1,187 $1,262
Change in margin deposits, net (244) (100) (31)
Western States and similar
settlements payments 57 --- ---
Adjusted cash flow provided by
continuing operations $541 $1,087 $1,231
Capital expenditures ** (229) (337) (213)
Emission allowances activity, net (81) (155) (149)
Free cash flow provided by
continuing operations $231 $595 $869
* Outlook assumes no changes in working capital.
** Includes capitalized interest of $5, $20 and $37 million for 2007E,
2008E and 2009E, respectively.
NON-GAAP FINANCIAL MEASURES
This press release and the attached financial tables include the
following non-GAAP financial measures:
Retail gross margin*
Open energy gross margin
Open wholesale gross margin
Retail contribution margin
Wholesale open contribution margin
EBITDA
Adjusted EBITDA
Open EBITDA
Adjusted cash flow provided by (used in) continuing operations
Free cash flow provided by (used in) continuing operations
Net 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.
* Previously titled "adjusted retail gross margin."
WEBCAST OF EARNINGS CONFERENCE CALL
Reliant Energy has scheduled its second-quarter 2007 earnings
conference call for Thursday August 2, 2007, at 10 a.m. CT. Interested
parties may listen to a live audio broadcast of the conference call at
http://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 1.9
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) 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.
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 and other financial
items, and our plans and objectives for future operations or about our
future economic performance, transactions and dispositions and financings
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 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 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.
Reliant Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(Thousands of Dollars, except per share amounts)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2007 2006 2007 2006
Revenues:
Revenues (including
$(10,848), $52,393,
$3,722 and $201,899
unrealized
gains (losses)) $2,649,915 $2,774,903 $5,012,516 $5,227,588
Expenses:
Purchased power, fuel and
cost of gas sold
(including $(315,497),
$(364), $192,162 and
$(126,402) unrealized
gains (losses)) 2,475,716 2,233,908 3,919,207 4,483,957
Operation and maintenance 233,966 229,975 464,707 415,530
Selling, general and
administrative 103,084 91,690 190,681 162,430
Western states and similar
settlements - - 22,000 -
Gains on sales of assets
and emission allowances,
net (1,727) (4,854) (1,727) (156,330)
Depreciation and
amortization 110,603 91,092 202,572 171,597
Total operating expense 2,921,642 2,641,811 4,797,440 5,077,184
Operating Income (Loss) (271,727) 133,092 215,076 150,404
Other Income (Expense):
Income of equity
investment, net 1,366 2,061 2,526 2,387
Debt extinguishment
premium and consent fees (71,269) - (71,269) -
Other, net (574) 744 494 829
Interest expense (121,975) (103,444) (209,045) (211,606)
Interest income 8,232 6,877 18,696 15,895
Total other expense (184,220) (93,762) (258,598) (192,495)
Income (Loss) from
Continuing Operations
Before Income Taxes (455,947) 39,330 (43,522) (42,091)
Income tax expense
(benefit) (174,884) 16,603 (22,822) 74,249
Income (Loss) from
Continuing Operations (281,063) 22,727 (20,700) (116,340)
Loss from discontinued
operations (1,889) (8,551) (3,541) (3,571)
Income (Loss) Before
Cumulative Effect of
Accounting Change (282,952) 14,176 (24,241) (119,911)
Cumulative effect of
accounting change, net of
tax - - - 968
Net Income (Loss) $(282,952) $14,176 $(24,241) $(118,943)
Basic Earnings (Loss) Per
Share:
Income (loss) from
continuing operations $(0.82) $0.07 $(0.06) $(0.38)
Loss from discontinued
operations (0.01) (0.02) (0.01) (0.01)
Cumulative effect of
accounting change, net of
tax - - - -
Net income (loss) $(0.83) $0.05 $(0.07) $(0.39)
Diluted Earnings (Loss)
Per Share:
Income (loss) from
continuing operations $(0.82) $0.07 $(0.06) $(0.38)
Loss from discontinued
operations (0.01) (0.02) (0.01) (0.01)
Cumulative effect of
accounting change, net of
tax - - - -
Net income (loss) $(0.83) $0.05 $(0.07) $(0.39)
Weighted Average Common
Shares Outstanding (in
thousands):
- Basic 342,074 306,780 340,717 306,208
- Diluted 342,074 342,592 340,717 306,208
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
Reliant Energy, Inc. and Subsidiaries
Results of Operations by Segment - Adjusted and Open
(Millions of Dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 Change 2007 2006 Change
Retail Energy:
Revenues $1,994 $2,217 $(223) $3,695 $3,904 $(209)
Purchased power 2,117 1,836 281 3,026 3,530 (504)
Unrealized (gains) losses on
energy derivatives 360 (34) 394 (256) 30 (286)
Gross margin - Retail
Energy (1)(2) 237 347 (110) 413 404 9
Operation and maintenance 60 58 2 121 109 12
Selling and marketing 30 30 - 60 54 6
Bad debt expense 21 22 (1) 38 36 2
Contribution margin -
Retail Energy 126 237 (111) 194 205 (11)
Unrealized gains (losses) on
energy derivatives (360) 34 (394) 256 (30) 286
Contribution margin,
including unrealized
gains/losses on energy
derivatives (3) (234) 271 (505) 450 175 275
Wholesale Energy:
Revenues $797 $698 $99 $1,545 $1,609 $(64)
Purchased power 500 538 (38) 1,121 1,240 (119)
Historical and operational
wholesale hedges 30 89 (59) 63 209 (146)
Unrealized (gains) losses on
energy derivatives (34) (18) (16) 60 (105) 165
Open gross margin -
Wholesale Energy (1) 293 231 62 547 473 74
Operation and maintenance 175 173 2 345 307 38
Bad debt expense - - - (1) (3) 2
Open contribution margin -
Wholesale Energy 118 58 60 203 169 34
Historical and operational
wholesale hedges (30) (89) 59 (63) (209) 146
Unrealized gains (losses) on
energy derivatives 34 18 16 (60) 105 (165)
Contribution margin,
including historical and
operational wholesale
hedgesand unrealized
gains/losses on energy
derivatives (3) 122 (13) 135 80 65 15
Other Operations:
Revenues $4 $- $4 $7 $1 $6
Purchased power - - - - - -
Operation and maintenance - - - 1 - 1
Contribution margin - Other
Operations (3) 4 - 4 6 1 5
Eliminations:
Revenues $(145) $(140) $(5) $(235) $(286) $51
Purchased power (141) (140) (1) (228) (286) 58
Operation and maintenance (2) - (2) (3) - (3)
Total (2) - (2) (4) - (4)
Consolidated:
Contribution margin - Retail
Energy 126 237 (111) 194 205 (11)
Open contribution margin -
Wholesale Energy 118 58 60 203 169 34
Contribution margin - Other
Operations 4 - 4 6 1 5
Eliminations (2) - (2) (4) - (4)
Total 246 295 (49) 399 375 24
Other general and
administrative (54) (40) (14) (95) (75) (20)
Income of equity investment,
net 2 2 - 3 2 1
Other, net (1) 1 (2) - 1 (1)
Open EBITDA 193 258 (65) 307 303 4
Historical and operational
wholesale hedges (30) (89) 59 (63) (209) 146
Gains on sales of assets and
emission allowances, net 2 5 (3) 2 156 (154)
Adjusted EBITDA 165 174 (9) 246 250 (4)
Unrealized gains (losses) on
energy derivatives (326) 52 (378) 196 75 121
Western states and similar
settlements - - - (22) - (22)
Debt extinguishment premium
and consent fees (71) - (71) (71) - (71)
EBITDA (232) 226 (458) 349 325 24
Depreciation and
amortization (110) (91) (19) (202) (172) (30)
Interest expense (122) (103) (19) (209) (211) 2
Interest income 8 7 1 18 16 2
Income (loss) from
continuing operations
before income taxes $(456) $39 $(495) $(44) $(42) $(2)
(1) Gross margin (revenues less purchased power, fuel and cost of gas
sold) excludes depreciation, amortization, labor and other product
costs.
(2) Previously titled "adjusted retail gross margin" or "retail energy
gross margin, excluding unrealized gains/losses on energy
derivatives."
(3) Segment profit or loss measure.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
Reliant Energy, Inc. and Subsidiaries
Consolidated Balance Sheets
(Thousands of Dollars)
June 30, 2007 December 31, 2006
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $165,994 $463,909
Restricted cash 5,334 24,980
Accounts and notes receivable,
principally customer, net of
allowance of $31,894 and $33,332 1,288,726 1,043,637
Inventory 283,768 275,437
Derivative assets 320,847 489,726
Margin deposits 323,469 452,605
Accumulated deferred income taxes 262,979 279,479
Prepayments and other current assets 173,968 141,016
Current assets of discontinued operations - 2,460
Total current assets 2,825,085 3,173,249
Property, plant and equipment, gross 7,257,694 7,192,437
Accumulated depreciation (1,576,153) (1,450,442)
Property, Plant and Equipment, net 5,681,541 5,741,995
Other Assets:
Goodwill 379,644 381,594
Other intangibles, net 410,495 423,745
Derivative assets 180,256 203,857
Accumulated deferred income taxes 109,458 87,858
Prepaid lease 257,556 264,328
Other 239,138 290,507
Total other assets 1,576,547 1,651,889
Total Assets $10,083,173 $10,567,133
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt
and short-term borrowings $381,011 $355,264
Accounts payable, principally trade 845,316 664,630
Derivative liabilities 841,538 1,164,809
Margin deposits - 16,490
Other 405,462 488,764
Current liabilities of discontinued
operations 1,828 3,286
Total current liabilities 2,475,155 2,693,243
Other Liabilities:
Derivative liabilities 282,945 420,534
Other 308,471 324,145
Total other liabilities 591,416 744,679
Long-term Debt 2,987,441 3,177,691
Commitments and Contingencies
Temporary Equity Stock-based Compensation 2,620 1,647
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; 342,425,141
and 337,623,392 issued) 103 99
Additional paid-in capital 6,201,536 6,174,665
Retained deficit (2,024,874) (2,026,316)
Accumulated other comprehensive loss (150,224) (198,575)
Total stockholders' equity 4,026,541 3,949,873
Total Liabilities and Equity $10,083,173 $10,567,133
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
Reliant Energy, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30,
2007 2006
(in thousands)
Cash Flows from Operating Activities:
Net loss $(24,241) $(118,943)
Loss from discontinued operations 3,541 3,571
Net loss from continuing operations and
cumulative effect of accounting change (20,700) (115,372)
Adjustments to Reconcile Net Loss to
Net Cash Provided by (Used in)
Operating Activities:
Cumulative effect of accounting change - (968)
Depreciation and amortization 202,572 171,597
Deferred income taxes (30,116) 68,644
Net changes in energy derivatives (166,400) (43,342)
Amortization of deferred financing costs 45,443 7,982
Gains on sales of assets and
emission allowances, net (1,727) (156,330)
Debt extinguishment premium and consent
fees 71,269 -
Other, net 6,364 4,611
Changes in other assets and liabilities:
Accounts and notes receivable, net (212,797) (135,413)
Inventory (18,390) 6,269
Margin deposits, net 112,646 311,582
Net derivative assets and liabilities (27,380) (137,484)
Western states and similar settlements
payments (35,000) (159,319)
Accounts payable 206,017 35,514
Other current assets (24,432) 8,304
Other assets (2,980) 14,663
Taxes payable/receivable (7,444) (29,884)
Other current liabilities (75,353) 31,285
Other liabilities 2,493 2,845
Net cash provided by (used in) continuing
operations from operating activities 24,085 (114,816)
Net cash used in discontinued
operations from operating activities (2,540) (36,997)
Net cash provided by (used in)
operating activities 21,545 (151,813)
Cash Flows from Investing Activities:
Capital expenditures (99,172) (41,919)
Proceeds from sales of assets, net 380 1,382
Proceeds from sales of emission allowances 3,346 197,201
Purchases of emission allowances (14,127) (3,273)
Restricted cash 19,646 17,033
Other, net 1,750 4,750
Net cash provided by (used in) continuing
operations from investing activities (88,177) 175,174
Net cash provided by discontinued
operations from investing activities - 967,568
Net cash provided by (used in)
investing activities (88,177) 1,142,742
Cash Flows from Financing Activities:
Payments of long-term debt (1,465,891) (326,201)
Proceeds from long-term debt 1,300,000 -
Increase (decrease) in short-term
borrowings and revolving credit
facilities, net 6,554 (55,337)
Payments of financing costs (29,634) -
Payments of debt extinguishment
premium and consent fees (71,269) -
Proceeds from issuances of stock 28,957 10,031
Net cash used in continuing
operations from financing activities (231,283) (371,507)
Net cash used in discontinued
operations from financing activities - (638,000)
Net cash used in financing activities (231,283) (1,009,507)
Net Change in Cash and Cash Equivalents (297,915) (18,578)
Cash and Cash Equivalents at Beginning of
Period 463,909 88,397
Cash and Cash Equivalents at End of
Period $165,994 $69,819
Free Cash Flow Reconciliation
(Unaudited)
Six Months Ended June 30,
2007 2006
(in millions)
Operating cash flow from continuing operations $24 $(115)
Western states and similar settlements payments 57 159
Change in margin deposits, net (113) (312)
Adjusted cash flow used in continuing operations (32) (268)
Capital expenditures (99) (42)
Proceeds from sales of emission allowances 3 197
Purchases of emission allowances (14) (3)
Free cash flow used in continuing operations $(142) $(116)
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
Reliant Energy, Inc. and Subsidiaries
Retail Energy Data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 Change 2007 2006 Change
(in millions) (in millions)
Mass gross margin $201 $272 $(71) $356 $297 $59
Commercial and industrial
gross margin 52 88 (36) 68 108 (40)
Market usage adjustments (16) (13) (3) (11) (1) (10)
Retail gross margin (1) 237 347 (110) 413 404 9
Operation and maintenance (60) (58) (2) (121) (109) (12)
Selling and marketing (30) (30) - (60) (54) (6)
Bad debt expense (21) (22) 1 (38) (36) (2)
Retail contribution margin 126 237 (111) 194 205 (11)
Unrealized gains (losses)
on energy derivatives (360) 34 (394) 256 (30) 286
Total retail energy
contribution margin,
including unrealized
gains/losses on
energy derivatives (2) $(234) $271 $(505) $450 $175 $275
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
(gigawatt hours) (gigawatt hours)
Electricity Sales to End-
Use Retail Customers:
Mass:
Residential:
Houston 3,542 4,572 6,187 7,399
Non-Houston 1,923 2,013 3,849 3,502
Small Business:
Houston 756 954 1,471 1,719
Non-Houston 365 382 668 652
Total Mass 6,586 7,921 12,175 13,272
Commercial and Industrial:
ERCOT (3) 9,052 8,631 17,062 16,147
Non-ERCOT 1,106 1,539 2,085 3,143
Total Commercial and
Industrial 10,158 10,170 19,147 19,290
Market usage adjustments 28 (62) (73) 11
Total 16,772 18,029 31,249 32,573
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
(in thousands, (in thousands,
metered locations) metered locations)
Weighted Average Retail
Customer Count:
Mass:
Residential:
Houston 1,066 1,189 1,074 1,201
Non-Houston 565 490 560 480
Small Business:
Houston 117 134 119 135
Non-Houston 35 27 34 28
Total Mass 1,783 1,840 1,787 1,844
Commercial and Industrial:
ERCOT (3) 87 75 85 74
Non-ERCOT 2 2 2 2
Total Commercial and
Industrial 89 77 87 76
Total 1,872 1,917 1,874 1,920
June 30, December 31,
2007 2006
(in thousands, metered locations)
Retail Customers:
Mass:
Residential:
Houston 1,058 1,095
Non-Houston 567 547
Small Business:
Houston 115 124
Non-Houston 36 33
Total Mass 1,776 1,799
Commercial and Industrial:
ERCOT (3) 89 75
Non-ERCOT 2 1
Total Commercial and
Industrial 91 76
Total 1,867 1,875
(1) Previously titled "adjusted retail gross margin" or "retail
energy gross margin, excluding unrealized gains/losses on energy
derivatives."
(2) Segment profit or loss measure.
(3) 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, 2006.
Reliant Energy, Inc. and Subsidiaries
Wholesale Energy Data
(Unaudited)
Three Months Ended June 30,
2007 2006
GWh %Economic(1) GWh %Economic(1)
Economic Generation Volume (2):
PJM Coal 6,028.7 83% 5,847.6 81%
MISO Coal 2,063.3 75% 1,748.4 63%
PJM/MISO Gas 349.8 5% 248.0 4%
West 899.3 13% 345.8 5%
Other (3) 1,413.3 69% 1,467.3 91%
Total 10,754.4 41% 9,657.1 39%
Commercial Capacity Factor (4):
PJM Coal 75.9% 70.6%
MISO Coal 51.3% 77.1%
PJM/MISO Gas 88.8% 90.7%
West 95.1% 87.9%
Other 91.9% 94.3%
Total 75.3% 76.5%
Generation Volume (5): GWh GWh
PJM Coal 4,575.2 4,128.1
MISO Coal 1,058.7 1,347.6
PJM/MISO Gas 310.5 224.9
West 855.5 304.1
Other 1,298.7 1,383.4
Total 8,098.6 7,388.1
Unit Margin ($/MWh) (6):
PJM Coal $32.57 $26.16
MISO Coal 30.23 19.29
PJM/MISO Gas 28.99 40.02
West - NM (7)
Other 5.39 -
Weighted Average Total $24.33 $18.95
Three Months Ended June 30,
2007 2006 Change
Open energy gross margin (8): (in millions)
PJM Coal $149 $108 $41
MISO Coal 32 26 6
PJM/MISO Gas 9 9 -
West - (3) 3
Other 7 - 7
Total 197 140 57
Other margin (9):
PJM Coal 15 7 8
MISO Coal 3 2 1
PJM/MISO Gas 25 8 17
West 36 46 (10)
Other 17 28 (11)
Total 96 91 5
Open wholesale gross margin 293 231 62
Operation and maintenance (175) (173) (2)
Bad debt expense - - -
Wholesale open contribution margin 118 58 60
Historical and operational
wholesale hedges
Power (55) (65) 10
Fuel 5 5 -
Tolling/Other 20 (29) 49
Total historical and operational
wholesale hedges (30) (89) 59
Unrealized gains (losses) on
energy derivatives 34 18 16
Total wholesale energy contribution
margin, including historical and
operational wholesale hedges and
unrealized gains/losses on energy
derivatives (10) $122 $(13) $135
Six Months Ended June 30,
2007 2006
GWh %Economic(1) GWh %Economic(1)
Economic Generation Volume (2):
PJM Coal 12,127.1 84% 11,692.4 81%
MISO Coal 4,244.7 78% 3,040.3 55%
PJM/MISO Gas 417.1 3% 286.4 2%
West 908.0 7% 1,270.8 9%
Other (3) 2,750.3 67% 2,874.5 88%
Total 20,447.2 39% 19,164.4 37%
Commercial Capacity Factor (4):
PJM Coal 77.6% 78.3%
MISO Coal 56.4% 84.7%
PJM/MISO Gas 83.8% 77.4%
West 94.9% 96.5%
Other 91.4% 88.8%
Total 75.9% 82.1%
Generation Volume (5): GWh GWh
PJM Coal 9,407.4 9,158.4
MISO Coal 2,395.0 2,573.7
PJM/MISO Gas 349.6 221.6
West 861.4 1,226.4
Other 2,512.9 2,553.5
Total 15,526.3 15,733.6
Unit Margin ($/MWh) (6):
PJM Coal $31.68 $26.97
MISO Coal 28.81 21.37
PJM/MISO Gas 28.60 40.61
West NM (7) NM (7)
Other 5.57 NM (7)
Weighted Average Total $24.93 $19.58
Six Months Ended June 30,
2007 2006 Change
Open energy gross margin (8): (in millions)
PJM Coal $298 $247 $51
MISO Coal 69 55 14
PJM/MISO Gas 10 9 1
West (4) (2) (2)
Other 14 (1) 15
Total 387 308 79
Other margin (9):
PJM Coal 22 16 6
MISO Coal 5 3 2
PJM/MISO Gas 36 11 25
West 59 83 (24)
Other 38 52 (14)
Total 160 165 (5)
Open wholesale gross margin 547 473 74
Operation and maintenance (345) (307) (38)
Bad debt expense 1 3 (2)
Wholesale open contribution margin 203 169 34
Historical and operational
wholesale hedges
Power (111) (180) 69
Fuel 10 12 (2)
Tolling/Other 38 (41) 79
Total historical and
operational wholesale hedges (63) (209) 146
Unrealized gains (losses) on
energy derivatives (60) 105 (165)
Total wholesale energy contribution
margin, including historical and
operational wholesale hedges and
unrealized gains/losses on
energy derivatives (10) $80 $65 $15
(1) Represents economic generation volume (hours) divided by maximum
generation hours (maximum plant capacity X 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) Includes maximum generation hours from certain units in 2007 that
were excluded in 2006 because a purchase power agreement was in
place during that period.
(4) Generation volume divided by economic generation volume.
(5) Excludes generation volume related to power purchase agreements,
including tolling agreements.
(6) Represents open energy gross margin divided by generation volume.
(7) NM is not meaningful.
(8) 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 and our historical and
operational wholesale hedges.
(9) Other margin represents power purchase agreements, capacity
payments, ancillary revenues and selective commercial hedge
strategies.
(10) 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, 2006.
Reliant Energy, Inc. and Subsidiaries
PJM Coal and MISO Coal (1)
(Unaudited)
Summer/Winter
Average Heat Q2 economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Cheswick 580 10.0 966.1 933.9
Conemaugh (2) 280 9.4 590.8 603.7
Elrama 465 11.3 764.4 708.7
Keystone (2) 282 9.5 595.7 585.8
Portland 400 9.8 676.7 611.1
Seward 521 9.6 1,052.8 1,082.4
Shawville (2) 566 10.3 1,009.6 1,008.3
Titus 246 10.8 372.6 313.7
PJM Coal Total 3,340 6,028.7 5,847.6
Q2 commercial Q2 generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Cheswick 53.0% 31.1% 512.2 290.0
Conemaugh (2) 74.7% 99.9% 441.4 603.1
Elrama 61.4% 49.4% 469.2 350.1
Keystone (2) 95.1% 83.8% 566.5 490.7
Portland 66.2% 86.8% 447.7 530.2
Seward 82.6% 59.5% 870.1 643.5
Shawville (2) 91.3% 90.7% 921.5 914.6
Titus 93.0% 97.5% 346.6 305.9
PJM Coal Total 75.9% 70.6% 4,575.2 4,128.1
Summer/Winter
Average Heat Q2 economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Avon Lake 721 9.3 1,197.7 1,064.2
New Castle 328 10.6 491.5 414.9
Niles 216 10.5 374.1 269.3
MISO Coal Total 1,265 2,063.3 1,748.4
Q2 commercial Q2 generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Avon Lake 38.1% 82.9% 456.2 882.5
New Castle 53.9% 67.2% 264.7 278.8
Niles 90.3% 69.2% 337.8 186.3
MISO Coal Total 51.3% 77.1% 1,058.7 1,347.6
Summer/Winter
Average Heat Q2 YTD economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Cheswick 580 10.0 1,884.1 1,765.0
Conemaugh (2) 280 9.4 1,186.5 1,206.5
Elrama 465 11.3 1,611.9 1,549.2
Keystone (2) 282 9.5 1,182.5 1,153.4
Portland 400 9.8 1,356.5 1,227.5
Seward 521 9.6 2,118.9 2,191.6
Shawville (2) 566 10.3 2,054.5 1,973.4
Titus 246 10.8 732.2 625.8
PJM Coal Total 3,340 12,127.1 11,692.4
Q2 YTD commercial Q2 YTD generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Cheswick 72.1% 63.3% 1,358.5 1,116.5
Conemaugh (2) 83.6% 97.7% 992.3 1,179.2
Elrama 66.9% 65.5% 1,079.0 1,014.1
Keystone (2) 81.4% 81.5% 962.3 940.2
Portland 72.8% 90.5% 987.5 1,110.9
Seward 68.0% 65.4% 1,440.9 1,434.2
Shawville (2) 92.9% 89.7% 1,909.2 1,770.8
Titus 92.6% 94.7% 677.7 592.5
PJM Coal Total 77.6% 78.3% 9,407.4 9,158.4
Summer/Winter
Average Heat Q2 YTD economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Avon Lake 721 9.3 2,502.2 1,867.2
New Castle 328 10.6 999.2 651.9
Niles 216 10.5 743.3 521.2
MISO Coal Total 1,265 4,244.7 3,040.3
Q2 YTD commercial Q2 YTD generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Avon Lake 43.0% 88.2% 1,075.9 1,646.6
New Castle 66.0% 76.7% 659.6 500.2
Niles 88.7% 81.9% 659.5 426.9
MISO Coal Total 56.4% 84.7% 2,395.0 2,573.7
(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, 2006.
Reliant Energy, Inc. and Subsidiaries
PJM/MISO Gas (1)
(Unaudited)
Summer/Winter
Average Heat Q2 economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Aurora (2) 942 10.5 11.9 3.8
Blossburg 23 14.6 0.8 0.3
Brunot Island 315 10.4 2.9 -
Gilbert 614 11.0 16.9 14.7
Glen Gardner 184 14.6 2.0 1.8
Hamilton 23 14.8 1.7 0.1
Hunterstown 70 14.8 5.2 0.5
Hunterstown CCGT 833 7.0 258.6 214.3
Mountain 47 14.3 4.3 0.8
Orrtanna 23 14.4 2.5 0.3
Portland 185 11.2 3.6 1.6
Sayreville 264 13.8 9.0 4.4
Shawnee 23 14.0 - -
Shawville 5-7 (3) 6 10.2 - -
Titus 35 17.4 - -
Tolna 47 14.2 3.2 0.7
Werner 252 13.8 8.9 0.1
Shelby 356 9.8 18.3 4.6
PJM/MISO Gas Total 4,242 349.8 248.0
Q2 commercial Q2 generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Aurora (2) 69.7% 28.9% 8.3 1.1
Blossburg 100.0% 100.0% 0.8 0.3
Brunot Island 100.0% 0.0% 2.9 (1.1)
Gilbert 38.5% 30.6% 6.5 4.5
Glen Gardner 100.0% 88.9% 2.0 1.6
Hamilton 100.0% 100.0% 1.7 0.1
Hunterstown 98.1% 100.0% 5.1 0.5
Hunterstown CCGT 94.0% 97.0% 243.0 207.9
Mountain 100.0% 100.0% 4.3 0.8
Orrtanna 100.0% 100.0% 2.5 0.3
Portland 100.0% 87.5% 3.6 1.4
Sayreville 23.3% 75.0% 2.1 3.3
Shawnee 0.0% 0.0% (0.1) -
Shawville 5-7 (3) 0.0% 0.0% - -
Titus 0.0% 0.0% (0.6) (1.2)
Tolna 100.0% 100.0% 3.2 0.7
Werner 87.6% 100.0% 7.8 0.1
Shelby 95.1% 100.0% 17.4 4.6
PJM/MISO Gas Total 88.8% 90.7% 310.5 224.9
Summer/Winter
Average Heat Q2 YTD economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Aurora (2) 942 10.5 15.6 7.0
Blossburg 23 14.6 4.0 1.2
Brunot Island 315 10.4 3.7 -
Gilbert 614 11.0 25.1 43.6
Glen Gardner 184 14.6 2.2 2.0
Hamilton 23 14.8 1.7 0.2
Hunterstown 70 14.8 5.2 0.6
Hunterstown CCGT 833 7.0 302.8 214.3
Mountain 47 14.3 5.5 1.4
Orrtanna 23 14.4 3.0 0.3
Portland 185 11.2 6.8 1.8
Sayreville 264 13.8 9.7 4.8
Shawnee 23 14.0 0.1 -
Shawville 5-7 (3) 6 10.2 - -
Titus 35 17.4 - -
Tolna 47 14.2 4.0 0.9
Werner 252 13.8 9.4 0.1
Shelby 356 9.8 18.3 8.2
PJM/MISO Gas Total 4,242 417.1 286.4
Q2 YTD commercial Q2 YTD generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Aurora (2) 53.2% 15.7% 8.3 1.1
Blossburg 100.0% 100.0% 4.0 1.2
Brunot Island 100.0% 0.0% 3.7 (3.0)
Gilbert 47.0% 19.7% 11.8 8.6
Glen Gardner 100.0% 90.0% 2.2 1.8
Hamilton 100.0% 100.0% 1.7 0.2
Hunterstown 96.2% 100.0% 5.0 0.6
Hunterstown CCGT 88.4% 94.4% 267.7 202.4
Mountain 100.0% 100.0% 5.5 1.4
Orrtanna 100.0% 100.0% 3.0 0.3
Portland 100.0% 77.8% 6.8 1.4
Sayreville 18.6% 58.3% 1.8 2.8
Shawnee 0.0% 0.0% - (0.1)
Shawville 5-7 (3) 0.0% 0.0% (0.1) -
Titus 0.0% 0.0% (1.5) (1.7)
Tolna 100.0% 100.0% 4.0 0.9
Werner 88.3% 0.0% 8.3 (0.4)
Shelby 95.1% 50.0% 17.4 4.1
PJM/MISO Gas Total 83.8% 77.4% 349.6 221.6
(1) Unless otherwise indicated, the Company owns a 100% interest in each
facility listed.
(2) Excludes generation volume 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, 2006.
Reliant Energy, Inc. and Subsidiaries
West and Other (1)
(Unaudited)
Summer/Winter
Average Heat Q2 economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Bighorn (2) 598 7.2 517.0 16.7
Coolwater 622 10.1 136.6 110.8
Ellwood (2) 54 13.3 - -
Etiwanda (2) 640 10.0 0.4 -
Mandalay (2) 560 10.9 111.7 79.8
Ormond Beach 1,516 9.6 133.6 138.5
West Total 3,990 899.3 345.8
Q2 commercial Q2 generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Bighorn (2) 100.0% 79.6% 517.0 13.3
Coolwater 96.3% 99.3% 131.6 110.0
Ellwood (2) 0.0% 0.0% (0.1) -
Etiwanda (2) 100.0% 0.0% 0.4 -
Mandalay (2) 99.4% 96.1% 111.0 76.7
Ormond Beach 71.6% 75.2% 95.6 104.1
West Total 95.1% 87.9% 855.5 304.1
Summer/Winter
Average Heat Q2 economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Channelview (2) 830 6.1 1,398.4 1,461.3
Choctaw 800 7.0 13.9 -
Indian River (2) 587 10.5 - -
Osceola (2) 470 11.0 1.0 6.0
Other Total 2,687 1,413.3 1,467.3
Q2 commercial Q2 generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Channelview (2) 91.8% 94.3% 1,283.8 1,377.4
Choctaw 100.0% 0.0% 13.9 -
Indian River (2) 0.0% 0.0% - -
Osceola (2) 100.0% 100.0% 1.0 6.0
Other Total 91.9% 94.3% 1,298.7 1,383.4
Summer/Winter
Average Heat Q2 YTD economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Bighorn (2) 598 7.2 517.0 935.5
Coolwater 622 10.1 136.6 110.8
Ellwood (2) 54 13.3 0.3 0.1
Etiwanda (2) 640 10.0 0.4 -
Mandalay (2) 560 10.9 120.1 85.9
Ormond Beach 1,516 9.6 133.6 138.5
West Total 3,990 908.0 1,270.8
Q2 YTD commercial Q2 YTD generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Bighorn (2) 99.8% 99.5% 515.8 931.0
Coolwater 95.2% 97.8% 130.0 108.4
Ellwood (2) 33.3% 100.0% 0.1 0.1
Etiwanda (2) 100.0% 0.0% 0.4 -
Mandalay (2) 99.5% 96.4% 119.5 82.8
Ormond Beach 71.6% 75.2% 95.6 104.1
West Total 94.9% 96.5% 861.4 1,226.4
Summer/Winter
Average Heat Q2 YTD economic generation
Capacity Rate volume (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Channelview (2) 830 6.1 2,735.3 2,864.7
Choctaw 800 7.0 13.9 -
Indian River (2) 587 10.5 0.1 -
Osceola (2) 470 11.0 1.0 9.8
Other Total 2,687 2,750.3 2,874.5
Q2 YTD commercial Q2 YTD generation
capacity factor volume (GWh)
Unit Name 2007 2006 2007 2006
Channelview (2) 91.3% 88.8% 2,497.9 2,543.7
Choctaw 100.0% 0.0% 13.9 -
Indian River (2) 100.0% 0.0% 0.1 -
Osceola (2) 100.0% 100.0% 1.0 9.8
Other Total 91.4% 88.8% 2,512.9 2,553.5
(1) Unless otherwise indicated, the Company owns a 100% interest in each
facility listed.
(2) Excludes generation volume during periods the unit operated under
power purchase agreements.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
Reliant Energy, Inc. and Subsidiaries
Net Debt
(Unaudited)
(in millions)
June 30, 2007
Debt:
Senior secured revolver $-
Senior secured notes 750
Senior unsecured notes 1,342
Convertible senior subordinated notes 2
Orion Power 12% notes (1) 432
PEDFA fixed-rate bonds for Seward plant due 2036 500
Channelview 342
Retail working capital facility -
Warrants (1)
Other (2) 1
Total GAAP debt 3,368
REMA operating leases (off-balance sheet) 480
Total debt and debt equivalents (3) 3,848
Less:
Cash and cash equivalents (166)
Restricted cash (5)
Net margin deposits (323)
Net Debt $3,354
(1) Orion 12% notes include purchase accounting adjustments of
$32 million.
(2) Other subsidiary debt.
(3) Debt equivalents include off-balance sheet REMA leases of
$480 million.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
SOURCE Reliant Energy, Inc.
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Related links:
http://www.reliant.com
CONTACT:
investors, Dennis Barber, +1-713-497-3042, or
media, Pat Hammond, +1-713-497-7723, both of Reliant Energy, Inc.
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