- PJM 2009 auction results validate improving supply/demand fundamentals
- Power plants deliver 90.8% commercial capacity factor for the quarter
- Retail business on track for $500 million contribution margin
HOUSTON, Nov. 8 /PRNewswire-FirstCall/ -- Reliant Energy, Inc. reported
open EBITDA of $443 million for the third quarter of 2007, compared to $461
million for the third quarter of 2006. Improved open wholesale contribution
margin was more than offset by lower retail contribution margin. Adjusted
EBITDA, which includes the effect of historical and operational wholesale
hedges and gains on sales of assets and emission allowances, was $443
million for the third quarter of 2007, compared to $338 million for the
third quarter of 2006. The improvement was due to a significant reduction
in losses from historical and operational hedges.
"For the quarter, the retail business was modestly ahead of
expectations and we had strong operational performance in the wholesale
business, which also benefited from improving market conditions," said Mark
Jacobs, president and chief executive officer. "The PJM capacity market
auctions are providing increased visibility of improvements in supply and
demand fundamentals which will help drive improved profitability and cash
flow going forward. The competitive market has responded by delivering
additional capacity to the region through non-traditional sources, like
demand side management."
Open EBITDA was $750 million for the nine months ended September 30,
2007 compared to $764 million for the same period of 2006. Adjusted EBITDA
was $689 million for the nine months ended September 30, 2007 compared to
$588 million for the same period of 2006. The improvement was due to a
significant reduction in losses from historical and operational hedges.
During the first nine months of 2007, the company reported free cash flow
provided by continuing operations of $8 million, compared to $109 million
for the same period of 2006. Free cash flow provided by continuing
operations in 2006 included $193 million in proceeds from the sale of
emission allowances, net of purchases.
On a GAAP basis, income from continuing operations before income taxes
was $224 million for the third quarter of 2007, compared to a loss from
continuing operations before income taxes of $254 million for the same
period of 2006. The third quarter 2007 income from continuing operations
before income taxes includes net unrealized losses from energy derivatives
of $28 million. The loss from continuing operations before income taxes for
the third quarter of 2006 includes $355 million of net unrealized losses
from energy derivatives and a $35 million charge related to western states
and similar settlements.
On a GAAP basis, income from continuing operations before income taxes
for the nine months ended September 30, 2007 was $180 million, compared to
a loss from continuing operations before income taxes of $296 million for
the same period of 2006. The nine months ended September 30, 2007 include
net gains from unrealized energy derivatives of $168 million, a $22 million
charge related to western states and similar settlements, and a $72 million
charge related to debt extinguishments. The reported numbers for 2006
include net losses from unrealized energy derivatives of $280 million and a
$35 million charge for western states and similar settlements. During the
first nine months of 2007, the company reported cash provided by continuing
operations from operating activities of $332 million, compared to $40
million for the same period of 2006.
OUTLOOK
Reliant Energy's outlook for open EBITDA is $915 million, $1,313
million and $1,493 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
assets and emission allowances, net is $829 million, $1,265 million and
$1,432 million for the same periods. The outlook for free cash flow
provided by continuing operations is $202 million, $580 million and $899
million for the years ending December 31, 2007, 2008 and 2009,
respectively.
This outlook is based on forward commodity prices as of September 21,
2007, and assumptions and estimates by Reliant Energy. Beginning August 20,
2007, Reliant Energy deconsolidated Channelview and is accounting for it
under the cost method. Therefore, the outlook excludes Channelview's
operational and financial results for all periods after August 19, 2007.
Open EBITDA
Outlook Reconciliation
($ millions) 2007E 2008E 2009E
Income from continuing operations before
income taxes $422 $775 $837
Unrealized gains on energy derivatives (436) (157) (11)
Western States and similar settlements 22 --- ---
Debt extinguishments 72 --- ---
Depreciation and amortization 432 447 462
Interest expense, net * 317 200 144
Adjusted EBITDA $829 $1,265 $1,432
Historical and operational wholesale hedges 105 48 61
Gains on sales of assets and emission
allowances, net (19) --- ---
Open EBITDA $915 $1,313 $1,493
* Reduced by $5, $22 and $37 million for 2007E, 2008E and 2009E,
respectively, for capitalized interest. 2007E includes $40 million
amortization of deferred financing costs associated with completion of
phase one of comprehensive refinancing plan during the second quarter.
Free Cash Flow from Continuing Operations
Outlook Reconciliation
($ millions) 2007E 2008E 2009E
Operating cash flow from continuing operations * $718 $1,125 $1,290
Change in margin deposits, net (268) (87) (31)
Western states and similar settlements payments 57 --- ---
Adjusted cash flow provided by continuing
operations $507 $1,038 $1,259
Capital expenditures ** (221) (313) (207)
Emission allowances activity, net (84) (145) (153)
Free cash flow provided by continuing operations $202 $580 $899
* Outlook assumes no changes in working capital.
** Includes capitalized interest of $5, $22 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*
Retail contribution margin
Open energy gross margin
Open wholesale gross margin
Open wholesale contribution margin
EBITDA
Adjusted EBITDA
Open EBITDA
Adjusted cash flow provided by (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 third-quarter 2007 earnings conference
call for Thursday November 8, 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 more than 1.8
million retail electricity customers, including residential and small
business customers and commercial, industrial, governmental and
institutional customers. Reliant also serves commercial, industrial,
governmental and institutional customers in the PJM (Pennsylvania, New
Jersey and Maryland) 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, regulatory and/or market
developments, the outcome of pending lawsuits, governmental proceedings and
investigations, the effects of competition, financial market conditions,
access to capital, the timing and extent of changes in commodity prices and
interest rates, weather conditions and other factors we discuss or refer to
in the "Risk Factors" section of our most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission.
Each forward-looking statement speaks only as of the date of the
particular statement and we undertake no obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
Reliant Energy, Inc. and Subsidiaries
Consolidated Statements of Operations
(Thousands of Dollars, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenues:
Revenues (including
$7,205, $(14,579),
$10,927 and $187,320
unrealized gains
(losses)) (including
$39,805, $0, $39,805
and $0 from affiliates) $3,543,192 $3,305,568 $8,555,708 $8,533,156
Expenses:
Cost of sales (including
$(34,719), $(340,886),
$157,443 and $(467,288)
unrealized gains (losses))
(including $37,782, $0,
$37,782 and $0 from
affiliates) 2,838,950 2,989,956 6,758,157 7,473,913
Operation and maintenance 209,374 220,460 674,081 635,990
Selling, general and
administrative 99,796 116,465 290,477 278,895
Western states and similar
settlements -- 35,000 22,000 35,000
Gains on sales of assets
and emission allowances,
net (16,769) (3,457) (18,496) (159,787)
Depreciation and
amortization 121,449 108,256 324,021 279,853
Total operating
expense 3,252,800 3,466,680 8,050,240 8,543,864
Operating Income (Loss) 290,392 (161,112) 505,468 (10,708)
Other Income (Expense):
Income of equity
investment, net 1,549 1,268 4,075 3,655
Debt extinguishments (1,320) -- (72,589) --
Other, net 1,590 (163) 2,084 666
Interest expense (74,235) (100,840) (283,280) (312,446)
Interest income 5,777 6,889 24,473 22,784
Total other expense (66,639) (92,846) (325,237) (285,341)
Income (Loss) from
Continuing Operations
Before Income Taxes 223,753 (253,958) 180,231 (296,049)
Income tax expense
(benefit) 63,850 (100,135) 41,028 (25,886)
Income (Loss) from
Continuing Operations 159,903 (153,823) 139,203 (270,163)
Income (loss) from
discontinued operations 2,479 (1,340) (1,062) (4,911)
Income (Loss) Before
Cumulative Effect of
Accounting Change 162,382 (155,163) 138,141 (275,074)
Cumulative effect of
accounting change, net
of tax -- -- -- 968
Net Income (Loss) $162,382 $(155,163) $138,141 $(274,106)
Basic Earnings (Loss) Per Share:
Income (loss) from
continuing operations $0.47 $(0.50) $0.41 $(0.88)
Income (loss) from
discontinued operations -- -- (0.01) (0.01)
Cumulative effect of
accounting change, net of
tax -- -- -- --
Net income (loss) $0.47 $(0.50) $0.40 $(0.89)
Diluted Earnings (Loss) Per Share:
Income (loss) from continuing
operations $0.45 $(0.50) $0.40 $(0.88)
Income (loss) from
discontinued operations 0.01 -- (0.01) (0.01)
Cumulative effect of
accounting change, net
of tax -- -- -- --
Net income (loss) $0.46 $(0.50) $0.39 $(0.89)
Weighted Average Common Shares
Outstanding (in thousands):
- Basic 343,835 307,975 341,768 306,804
- Diluted 354,204 307,975 352,325 306,804
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 Nine Months Ended
September 30, September 30,
2007 2006 Change 2007 2006 Change
Retail Energy:
Revenues $2,608 $2,571 $37 $6,303 $6,475 $(172)
Cost of sales 2,281 2,473 (192) 5,307 6,003 (696)
Unrealized (gains) losses on
energy derivatives 8 338 (330) (248) 368 (616)
Retail gross margin(1)(2) 335 436 (101) 748 840 (92)
Operation and maintenance 65 68 (3) 186 177 9
Selling and marketing 34 38 (4) 94 92 2
Bad debt expense 30 34 (4) 68 70 (2)
Retail contribution margin 206 296 (90) 400 501 (101)
Unrealized gains (losses) on
energy derivatives (8) (338) 330 248 (368) 616
Contribution margin,
including unrealized
gains/losses on energy
derivatives(3) 198 (42) 240 648 133 515
Wholesale Energy:
Revenues $1,053 $896 $157 $2,598 $2,505 $93
Cost of sales 675 679 (4) 1,796 1,919 (123)
Historical and operational
wholesale hedges 17 126 (109) 80 335 (255)
Unrealized (gains) losses on
energy derivatives 20 17 3 80 (88) 168
Open wholesale gross
margin(1) 415 360 55 962 833 129
Operation and maintenance 144 151 (7) 489 458 31
Bad debt expense (1) 1 (2) (2) (2) -
Open wholesale contribution
margin 272 208 64 475 377 98
Historical and operational
wholesale hedges (17) (126) 109 (80) (335) 255
Unrealized gains (losses) on
energy derivatives (20) (17) (3) (80) 88 (168)
Contribution margin,
including historical and
operational wholesale
hedges and unrealized
gains/losses on energy
derivatives(3) 235 65 170 315 130 185
Other Operations:
Revenues $3 $-- $3 $10 $1 $9
Cost of sales -- -- -- -- -- --
Operation and maintenance 4 -- 4 5 -- 5
Other operations contribution
margin(3) (1) -- (1) 5 1 4
Eliminations:
Revenues $(120) $(162) $42 $(355) $(448) $93
Cost of sales (117) (162) 45 (345) (448) 103
Operation and maintenance (2) -- (2) (5) -- (5)
Total (1) -- (1) (5) -- (5)
Consolidated:
Retail contribution margin 206 296 (90) 400 501 (101)
Open wholesale contribution
margin 272 208 64 475 377 98
Other operations contribution
margin (1) -- (1) 5 1 4
Eliminations (1) -- (1) (5) -- (5)
Total 476 504 (28) 875 879 (4)
Other general and
administrative (36) (44) 8 (131) (119) (12)
Income of equity investment, net 1 2 (1) 4 4 --
Other, net 2 (1) 3 2 -- 2
Open EBITDA 443 461 (18) 750 764 (14)
Historical and operational
wholesale hedges (17) (126) 109 (80) (335) 255
Gains on sales of assets and
emission allowances, net 17 3 14 19 159 (140)
Adjusted EBITDA 443 338 105 689 588 101
Unrealized gains (losses) on
energy derivatives (28) (355) 327 168 (280) 448
Western states and similar
settlements -- (35) 35 (22) (35) 13
Debt extinguishments (1) -- (1) (72) -- (72)
EBITDA 414 (52) 466 763 273 490
Depreciation and amortization (122) (108) (14) (324) (280) (44)
Interest expense (74) (101) 27 (283) (312) 29
Interest income 6 7 (1) 24 23 1
Income (loss) from continuing
operations before income
taxes $224 $(254) $478 $180 $(296) $476
(1) Gross margin (revenues less cost of sales) 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 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
Consolidated Balance Sheets
(Thousands of Dollars)
September 30, December 31,
2007 2006
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $396,402 $463,909
Restricted cash 5,209 24,980
Accounts and notes receivable,
principally customer, net of
allowance of $49,207 and $33,332 1,427,389 1,043,637
Inventory 269,800 275,437
Derivative assets 313,422 489,726
Margin deposits 235,187 452,605
Accumulated deferred income taxes 217,479 279,479
Investment in and receivables from
Channelview, net 74,400 --
Prepayments and other current assets 144,206 141,016
Current assets of discontinued operations 656 2,460
Total current assets 3,084,150 3,173,249
Property, plant and equipment, gross 6,834,749 7,192,437
Accumulated depreciation (1,564,501) (1,450,442)
Property, Plant and Equipment, net 5,270,248 5,741,995
Other Assets:
Goodwill 379,644 381,594
Other intangibles, net 410,063 423,745
Derivative assets 67,207 203,857
Accumulated deferred income taxes 75,158 87,858
Prepaid lease 284,891 264,328
Other 229,317 290,507
Total other assets 1,446,280 1,651,889
Total Assets $9,800,678 $10,567,133
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt
and short-term borrowings $10,874 $355,264
Accounts payable, principally trade 805,930 664,630
Derivative liabilities 715,465 1,164,809
Margin deposits -- 16,490
Other 488,216 488,764
Current liabilities of discontinued
operations -- 3,286
Total current liabilities 2,020,485 2,693,243
Other Liabilities:
Derivative liabilities 283,893 420,534
Other 282,403 324,145
Total other liabilities 566,296 744,679
Long-term Debt 2,984,694 3,177,691
Commitments and Contingencies
Temporary Equity Stock-based Compensation 3,639 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;
344,286,922 and 337,623,392 issued) 105 99
Additional paid-in capital 6,212,511 6,174,665
Retained deficit (1,862,492) (2,026,316)
Accumulated other comprehensive loss (124,560) (198,575)
Total stockholders' equity 4,225,564 3,949,873
Total Liabilities and Equity $9,800,678 $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)
Nine Months Ended September 30,
2007 2006
(in thousands)
Cash Flows from Operating Activities:
Net Income (loss) $138,141 $(274,106)
Loss from discontinued operations 1,062 4,911
Net income (loss) from continuing
operations and cumulative effect of
accounting change 139,203 (269,195)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by (Used
in) Operating Activities:
Cumulative effect of accounting change -- (968)
Depreciation and amortization 324,021 279,853
Deferred income taxes 25,246 (58,324)
Net changes in energy derivatives (126,819) 351,711
Amortization of deferred financing costs 47,817 12,101
Gains on sales of assets and emission
allowances, net (18,496) (159,787)
Western states and similar settlements -- 35,000
Debt extinguishments 72,589 --
Income of equity investments, net (4,075) (3,655)
Other, net 8,909 12,657
Changes in other assets and liabilities:
Accounts and notes receivable, net (368,989) (187,224)
Change in notes with affiliates, net (4,225) --
Inventory (6,117) 13,698
Margin deposits, net 200,928 220,321
Net derivative assets and liabilities (30,949) (127,512)
Western states and similar settlements
payments (35,000) (159,885)
Accounts payable 172,789 25,712
Other current assets (14,586) 14,972
Other assets (35,155) (25,598)
Taxes payable/receivable (12,334) (8,141)
Other current liabilities 6,352 77,330
Other liabilities (9,168) (3,341)
Net cash provided by continuing
operations from operating activities 331,941 39,725
Net cash used in discontinued
operations from operating activities (3,754) (45,093)
Net cash provided by (used in)
operating activities 328,187 (5,368)
Cash Flows from Investing Activities:
Capital expenditures (135,473) (63,887)
Proceeds from sales of assets, net 30,380 1,417
Proceeds from sales of emission allowances 6,794 205,186
Purchases of emission allowances (52,160) (12,443)
Restricted cash 4,716 16,497
Other, net 5,295 5,750
Net cash provided by (used in)
continuing operations from investing
activities (140,448) 152,520
Net cash provided by discontinued
operations from investing activities 520 967,566
Net cash provided by (used in)
investing activities (139,928) 1,120,086
Cash Flows from Financing Activities:
Payments of long-term debt (1,497,887) (331,028)
Proceeds from long-term debt 1,300,000 --
Increase (decrease) in short-term
borrowings and revolving credit
facilities, net 6,554 (189,364)
Payments of financing costs (31,245) --
Payments of debt extinguishments (72,589) --
Proceeds from issuances of stock 39,401 21,947
Net cash used in continuing operations
from financing activities (255,766) (498,445)
Net cash used in discontinued
operations from financing activities -- (638,000)
Net cash used in financing activities (255,766) (1,136,445)
Net Change in Cash and Cash Equivalents (67,507) (21,727)
Cash and Cash Equivalents at Beginning of
Period 463,909 88,397
Cash and Cash Equivalents at End of Period $396,402 $66,670
Free Cash Flow Reconciliation
(Unaudited)
Nine Months Ended September 30,
2007 2006
(in millions)
Operating cash flow from continuing operations $332 $40
Western states and similar settlements payments 57 160
Change in margin deposits, net (201) (220)
Adjusted cash flow provided by (used in)
continuing operations 188 (20)
Capital expenditures (135) (64)
Proceeds from sales of emission allowances 7 205
Purchases of emission allowances (52) (12)
Free cash flow provided by continuing operations $8 $109
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 Nine Months Ended
September 30, September 30,
2007 2006 Change 2007 2006 Change
(in millions) (in millions)
Mass gross margin $244 $315 $(71) $595 $606 $(11)
Commercial and industrial gross
margin 101 134 (33) 163 234 (71)
Market usage adjustments (10) (13) 3 (10) -- (10)
Retail gross margin(1) 335 436 (101) 748 840 (92)
Operation and maintenance (65) (68) 3 (186) (177) (9)
Selling and marketing (34) (38) 4 (94) (92) (2)
Bad debt expense (30) (34) 4 (68) (70) 2
Retail contribution margin 206 296 (90) 400 501 (101)
Unrealized gains (losses) on
energy derivatives (8) (338) 330 248 (368) 616
Total retail energy contribution
margin, including unrealized
gains/losses on energy
derivatives(2) $198 $(42) $240 $648 $133 $515
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(gigawatt hours) (gigawatt hours)
Electricity Sales to End-Use
Retail Customers:
Mass:
Residential:
Houston 4,740 5,403 10,848 12,635
Non-Houston 2,774 2,680 6,622 6,206
Small Business:
Houston 926 1,116 2,421 2,888
Non-Houston 467 463 1,127 1,093
Total Mass 8,907 9,662 21,018 22,822
Commercial and Industrial:
ERCOT(3) 10,491 9,283 27,601 25,415
Non-ERCOT 1,364 1,334 3,472 4,488
Total Commercial and
Industrial 11,855 10,617 31,073 29,903
Market usage adjustments 12 (115) (68) 12
Total 20,774 20,164 52,023 52,737
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
(in thousands, (in thousands,
metered locations) metered locations)
Weighted Average Retail Customer
Count:
Mass:
Residential:
Houston 1,052 1,147 1,067 1,184
Non-Houston 571 516 564 492
Small Business:
Houston 115 131 117 133
Non-Houston 37 29 35 28
Total Mass 1,775 1,823 1,783 1,837
Commercial and Industrial:
ERCOT(3) 89 75 86 75
Non-ERCOT 2 1 2 1
Total Commercial and
Industrial 91 76 88 76
Total 1,866 1,899 1,871 1,913
September 30, December 31,
2007 2006
(in thousands, metered locations)
Retail Customers:
Mass:
Residential:
Houston 1,038 1,095
Non-Houston 567 547
Small Business:
Houston 114 124
Non-Houston 37 33
Total Mass 1,756 1,799
Commercial and Industrial:
ERCOT(3) 90 75
Non-ERCOT 2 1
Total Commercial and
Industrial 92 76
Total 1,848 1,875
(1) Previously titled "adjusted retail gross margin" or "retail
energy gross margin, excluding unrealized gains/losses on energy
derivatives."
(2) Retail energy segment profit and 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 September 30,
2007 2006
% Economic % Economic
GWh (1) GWh (1)
Economic Generation (2):
PJM Coal 5,973.6 82% 5,930.6 81%
MISO Coal 1,941.8 70% 1,677.8 61%
PJM/MISO Gas 777.2 11% 662.8 9%
West (3) 2,303.5 33% 1,341.0 24%
Other (3) 1,021.5 38% 1,481.6 87%
Total 12,017.6 45% 11,093.8 45%
Commercial Capacity Factor (4):
PJM Coal 89.5% 87.2%
MISO Coal 85.7% 85.3%
PJM/MISO Gas 92.8% 97.1%
West 96.7% 73.8%
Other 93.1% 99.5%
Total 90.8% 87.5%
Generation (5): GWh GWh
PJM Coal 5,345.4 5,171.7
MISO Coal 1,664.1 1,431.5
PJM/MISO Gas 721.0 643.7
West 2,228.2 990.2
Other 951.3 1,474.1
Total 10,910.0 9,711.2
Open Energy Unit Margin ($/MWh)(6):
PJM Coal $31.05 $32.48
MISO Coal 29.45 27.94
PJM/MISO Gas 38.83 52.82
West 12.57 17.17
Other 9.46 3.39
Weighted Average Total $25.66 $27.19
Three Months Ended September 30,
2007 2006 Change
Open energy gross margin (7): (in millions)
PJM Coal $166 $168 $(2)
MISO Coal 49 40 9
PJM/MISO Gas 28 34 (6)
West 28 17 11
Other 9 5 4
Total 280 264 16
Other margin (8):
PJM Coal 20 9 11
MISO Coal 6 4 2
PJM/MISO Gas 43 16 27
West 48 39 9
Other 18 28 (10)
Total 135 96 39
Open wholesale gross margin 415 360 55
Operation and maintenance (144) (151) 7
Bad debt expense 1 (1) 2
Open wholesale contribution margin 272 208 64
Historical and operational wholesale
hedges
Power (48) (104) 56
Fuel 14 7 7
Tolling/Other 17 (29) 46
Total historical and operational
wholesale hedges (17) (126) 109
Unrealized gains (losses) on energy
derivatives (20) (17) (3)
Total wholesale energy contribution
margin, including historical and
operational wholesale hedges and
unrealized gains/losses on energy
derivatives(9) $235 $65 $170
Nine Months Ended September 30,
2007 2006
% Economic % Economic
GWh (1) GWh (1)
Economic Generation(2):
PJM Coal 18,100.9 83% 17,622.9 81%
MISO Coal 6,186.5 75% 4,718.1 57%
PJM/MISO Gas 1,194.5 6% 950.1 4%
West(3) 3,211.0 16% 2,611.9 13%
Other(3) 3,771.7 55% 4,356.0 88%
Total 32,464.6 41% 30,259.0 40%
Commercial Capacity Factor(4):
PJM Coal 81.5% 81.3%
MISO Coal 65.6% 84.9%
PJM/MISO Gas 89.8% 92.3%
West 96.3% 84.9%
Other 91.8% 92.5%
Total 81.4% 84.1%
Generation(5): GWh GWh
PJM Coal 14,752.9 14,330.3
MISO Coal 4,059.1 4,005.2
PJM/MISO Gas 1,072.9 877.3
West 3,091.9 2,218.1
Other 3,464.0 4,027.6
Total 26,440.8 25,458.5
Open Energy Unit Margin ($/MWh)(6):
PJM Coal $31.45 $28.96
MISO Coal 29.07 23.72
PJM/MISO Gas 35.42 49.01
West 7.76 6.76
Other 6.64 0.99
Weighted Average Total $25.23 $22.47
Nine Months Ended September 30,
2007 2006 Change
Open energy gross margin(7): (in millions)
PJM Coal $464 $415 $49
MISO Coal 118 95 23
PJM/MISO Gas 38 43 (5)
West 24 15 9
Other 23 4 19
Total 667 572 95
Other margin(8):
PJM Coal 42 21 21
MISO Coal 11 7 4
PJM/MISO Gas 79 31 48
West 107 122 (15)
Other 56 80 (24)
Total 295 261 34
Open wholesale gross margin 962 833 129
Operation and maintenance (489) (458) (31)
Bad debt expense 2 2 --
Open wholesale contribution margin 475 377 98
Historical and operational wholesale
hedges
Power (159) (284) 125
Fuel 24 19 5
Tolling/Other 55 (70) 125
Total historical and operational
wholesale hedges (80) (335) 255
Unrealized gains (losses) on energy
derivatives (80) 88 (168)
Total wholesale energy contribution
margin, including historical and
operational wholesale hedges and
unrealized gains/losses on energy
derivatives(9) $315 $130 $185
(1) Represents economic generation (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 divided by economic generation.
(5) Excludes generation volume related to power purchase agreements,
including tolling agreements.
(6) Represents open energy gross margin divided by generation.
(7) Open energy gross margin is calculated using the power sales prices
received by the plants less delivered spot fuel prices. This
figure excludes the effects of other margin and our historical and
operational wholesale hedges.
(8) Other margin represents power purchase agreements, capacity
payments, ancillary revenues and selective commercial hedge
strategies.
(9) Wholesale energy segment profit and loss measure.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
Reliant Energy, Inc. and Subsidiaries
PJM Coal and MISO Coal (1)
(Unaudited)
Summer/Winter
Average Q3 economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Cheswick 580 10.0 903.9 1,010.9
Conemaugh(2) 280 9.4 606.9 605.3
Elrama 465 11.3 682.9 655.3
Keystone(2) 282 9.5 606.1 605.6
Portland 400 9.8 688.9 644.3
Seward 521 9.6 1,076.5 1,082.1
Shawville(2) 566 10.3 1,007.4 985.1
Titus 246 10.8 401.0 342.0
PJM Coal Total 3,340 5,973.6 5,930.6
Q3 commercial
capacity factor Q3 generation (GWh)
Unit Name 2007 2006 2007 2006
Cheswick 90.2% 91.5% 815.6 924.8
Conemaugh(2) 93.4% 97.0% 566.7 587.2
Elrama 70.7% 80.3% 482.9 526.2
Keystone(2) 95.2% 97.4% 577.2 589.8
Portland 94.8% 76.0% 653.0 489.6
Seward 95.6% 80.2% 1,029.0 868.0
Shawville(2) 84.8% 88.6% 854.4 872.4
Titus 91.4% 91.7% 366.6 313.7
PJM Coal Total 89.5% 87.2% 5,345.4 5,171.7
Summer/Winter
Average Q3 economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Avon Lake 721 9.3 1,161.1 1,064.3
New Castle 328 10.6 443.0 315.1
Niles 216 10.5 337.7 298.4
MISO Coal Total 1,265 1,941.8 1,677.8
Q3 commercial
capacity factor Q3 generation (GWh)
Unit Name 2007 2006 2007 2006
Avon Lake 82.7% 85.4% 960.8 909.3
New Castle 91.7% 80.1% 406.4 252.3
Niles 87.9% 90.4% 296.9 269.9
MISO Coal Total 85.7% 85.3% 1,664.1 1,431.5
Summer/Winter
Average Q3 YTD economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Cheswick 580 10.0 2,788.0 2,775.9
Conemaugh (2) 280 9.4 1,793.4 1,811.8
Elrama 465 11.3 2,294.8 2,204.4
Keystone (2) 282 9.5 1,788.6 1,759.0
Portland 400 9.8 2,045.4 1,871.8
Seward 521 9.6 3,195.5 3,273.7
Shawville (2) 566 10.3 3,061.9 2,958.5
Titus 246 10.8 1,133.3 967.8
PJM Coal Total 3,340 18,100.9 17,622.9
Q3 YTD commercial Q3 YTD
capacity factor generation (GWh)
Unit Name 2007 2006 2007 2006
Cheswick 78.0% 73.5% 2,174.1 2,041.3
Conemaugh(2) 86.9% 97.5% 1,559.0 1,766.4
Elrama 68.1% 69.9% 1,561.9 1,540.3
Keystone(2) 86.1% 87.0% 1,539.5 1,530.0
Portland 80.2% 85.5% 1,640.5 1,600.6
Seward 77.3% 70.3% 2,469.9 2,302.2
Shawville(2) 90.3% 89.3% 2,763.7 2,643.3
Titus 92.1% 93.6% 1,044.3 906.2
PJM Coal Total 81.5% 81.3% 14,752.9 14,330.3
Summer/Winter
Average Q3 YTD economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Avon Lake 721 9.3 3,663.3 2,931.4
New Castle 328 10.6 1,442.2 967.0
Niles 216 10.5 1,081.0 819.7
MISO Coal Total 1,265 6,186.5 4,718.1
Q3 YTD commercial Q3 YTD
capacity factor generation (GWh)
Unit Name 2007 2006 2007 2006
Avon Lake 55.6% 87.2% 2,036.7 2,555.9
New Castle 73.9% 77.8% 1,066.0 752.5
Niles 88.5% 85.0% 956.4 696.8
MISO Coal Total 65.6% 84.9% 4,059.1 4,005.2
(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 Q3 economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Aurora (2) 942 10.5 35.5 38.1
Blossburg 23 14.6 1.8 0.6
Brunot Island 315 10.4 5.1 11.4
Gilbert 614 11.0 23.6 51.2
Glen Gardner 184 14.6 3.7 6.5
Hamilton 23 14.8 0.2 1.2
Hunterstown 70 14.8 2.4 3.5
Hunterstown CCGT 833 7.0 635.9 490.0
Mountain 47 14.3 7.4 7.9
Orrtanna 23 14.4 1.0 1.5
Portland 185 11.2 4.3 6.3
Sayreville 264 13.8 8.1 17.3
Shawnee 23 14.0 0.2 0.3
Shawville 5-7 (3) 6 10.2 -- --
Titus 35 17.4 -- --
Tolna 47 14.2 2.3 2.2
Werner 252 13.8 5.2 6.0
Shelby 356 9.8 40.5 18.8
PJM/MISO Gas Total 4,242 777.2 662.8
Q3 commercial
capacity factor Q3 generation (GWh)
Unit Name 2007 2006 2007 2006
Aurora (2) 99.2% 100.0% 35.2 38.1
Blossburg 100.0% 100.0% 1.8 0.6
Brunot Island 88.2% 99.1% 4.5 11.3
Gilbert 73.7% 94.9% 17.4 48.6
Glen Gardner 78.4% 98.5% 2.9 6.4
Hamilton 100.0% 100.0% 0.2 1.2
Hunterstown 100.0% 100.0% 2.4 3.5
Hunterstown CCGT 93.1% 97.0% 591.9 475.4
Mountain 100.0% 100.0% 7.4 7.9
Orrtanna 100.0% 93.3% 1.0 1.4
Portland 83.7% 87.3% 3.6 5.5
Sayreville 70.4% 98.8% 5.7 17.1
Shawnee 100.0% 100.0% 0.2 0.3
Shawville 5-7 (3) 0.0% 0.0% -- --
Titus 0.0% 0.0% -- --
Tolna 100.0% 100.0% 2.3 2.2
Werner 78.8% 98.3% 4.1 5.9
Shelby 99.8% 97.3% 40.4 18.3
PJM/MISO Gas Total 92.8% 97.1% 721.0 643.7
Summer/Winter
Average Q3 YTD economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Aurora (2) 942 10.5 51.1 45.1
Blossburg 23 14.6 5.8 1.8
Brunot Island 315 10.4 8.8 11.4
Gilbert 614 11.0 48.8 94.8
Glen Gardner 184 14.6 5.9 8.4
Hamilton 23 14.8 2.0 1.4
Hunterstown 70 14.8 7.6 4.1
Hunterstown CCGT 833 7.0 938.7 704.3
Mountain 47 14.3 12.8 9.3
Orrtanna 23 14.4 3.9 1.8
Portland 185 11.2 11.1 8.1
Sayreville 264 13.8 18.1 22.6
Shawnee 23 14.0 0.3 0.3
Shawville 5-7 (3) 6 10.2 -- --
Titus 35 17.4 -- --
Tolna 47 14.2 6.3 3.1
Werner 252 13.8 14.6 6.2
Shelby 356 9.8 58.7 27.4
PJM/MISO Gas Total 4,242 1,194.5 950.1
Q3 YTD commercial Q3 YTD generation
capacity factor (GWh)
Unit Name 2007 2006 2007 2006
Aurora (2) 85.1% 86.9% 43.5 39.2
Blossburg 100.0% 100.0% 5.8 1.8
Brunot Island 93.2% 99.1% 8.2 11.3
Gilbert 60.0% 60.3% 29.3 57.2
Glen Gardner 86.4% 97.6% 5.1 8.2
Hamilton 100.0% 100.0% 2.0 1.4
Hunterstown 98.7% 100.0% 7.5 4.1
Hunterstown CCGT 91.6% 97.0% 859.6 683.3
Mountain 100.0% 100.0% 12.8 9.3
Orrtanna 100.0% 94.4% 3.9 1.7
Portland 94.6% 85.2% 10.5 6.9
Sayreville 43.1% 90.3% 7.8 20.4
Shawnee 100.0% 100.0% 0.3 0.3
Shawville 5-7 (3) 0.0% 0.0% -- --
Titus 0.0% 0.0% -- --
Tolna 100.0% 100.0% 6.3 3.1
Werner 84.9% 98.4% 12.4 6.1
Shelby 98.6% 83.9% 57.9 23.0
PJM/MISO Gas Total 89.8% 92.3% 1,072.9 877.3
(1) Unless otherwise indicated, the Company owns a 100% interest in each
facility listed.
(2) Excludes generation during periods the unit operated under power
purchase agreements.
(3) The Company leases a 100% interest in the Shawville facility under a
facility interest lease agreement, which expires in 2026.
Reference is made to Reliant Energy, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 2006.
Reliant Energy, Inc. and Subsidiaries
West and Other (1)
(Unaudited)
Summer/Winter
Average Q3 economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Bighorn(2) 598 7.2 919.9 --
Coolwater 622 10.1 387.5 418.4
Ellwood(2) 54 13.3 -- --
Etiwanda(2) 640 10.0 -- --
Mandalay(2) 560 10.9 260.5 236.4
Ormond Beach 1,516 9.6 735.6 686.2
West Total 3,990 2,303.5 1,341.0
Q3 commercial
capacity factor Q3 generation (GWh)
Unit Name 2007 2006 2007 2006
Bighorn (2) 99.9% 0.0% 918.8 --
Coolwater 96.5% 93.6% 373.9 391.7
Ellwood (2) 0.0% 0.0% -- --
Etiwanda (2) 0.0% 0.0% -- --
Mandalay (2) 88.6% 97.2% 230.8 229.7
Ormond Beach 95.8% 53.7% 704.7 368.8
West Total 96.7% 73.8% 2,228.2 990.2
Summer/Winter
Average Q3 economic
Unit Name Capacity Heat Rate generation (GWh)
(MW) (MMBtu/MWh) 2007 2006
Channelview 830 6.1 784.8 1,481.6
Choctaw 800 7.0 236.7 --
Indian River(2) 587 10.5 -- --
Osceola(2) 470 11.0 -- --
Other Total 2,687 1,021.5 1,481.6
Q3 commercial
capacity factor Q3 generation (GWh)
Unit Name 2007 2006 2007 2006
Channelview 99.9% 99.5% 784.4 1,474.1
Choctaw 70.5% 0.0% 166.9 --
Indian River (2) 0.0% 0.0% -- --
Osceola (2) 0.0% 0.0% -- --
Other Total 93.1% 99.5% 951.3 1,474.1
Summer/Winter
Average Heat Q3 YTD economic
Capacity Rate generation (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Bighorn(2) 598 7.2 1,437.0 935.5
Coolwater 622 10.1 524.2 529.2
Ellwood(2) 54 13.3 -- 0.1
Etiwanda(2) 640 10.0 -- --
Mandalay(2) 560 10.9 380.6 322.3
Ormond Beach 1,516 9.6 869.2 824.8
West Total 3,990 3,211.0 2,611.9
Q3 YTD commercial Q3 YTD
capacity factor generation (GWh)
Unit Name 2007 2006 2007 2006
Bighorn(2) 99.9% 99.5% 1,435.8 931.0
Coolwater 96.4% 94.8% 505.5 501.7
Ellwood(2) 0.0% 100.0% -- 0.1
Etiwanda(2) 0.0% 0.0% -- --
Mandalay(2) 92.0% 96.9% 350.3 312.4
Ormond Beach 92.1% 57.3% 800.3 472.9
West Total 96.3% 84.9% 3,091.9 2,218.1
Summer/Winter
Average Heat Q3 YTD economic
Capacity Rate generation (GWh)
Unit Name (MW) (MMBtu/MWh) 2007 2006
Channelview 830 6.1 3,520.1 4,346.2
Choctaw 800 7.0 250.6 --
Indian River(2) 587 10.5 -- --
Osceola (2) 470 11.0 1.0 9.8
Other Total 2,687 3,771.7 4,356.0
Q3 YTD commercial Q3 YTD
capacity factor generation (GWh)
Unit Name 2007 2006 2007 2006
Channelview 93.2% 92.4% 3,282.3 4,017.8
Choctaw 72.1% 0.0% 180.7 --
Indian River(2) 0.0% 0.0% -- --
Osceola(2) 0.0% 100.0% 1.0 9.8
Other Total 91.8% 92.5% 3,464.0 4,027.6
(1) Unless otherwise indicated, the Company owns a 100% interest in each
facility listed.
(2) Excludes generation during periods the unit operated under power
purchase agreements.
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)
September 30, 2007
Debt:
Senior secured revolver $--
Senior secured notes 750
Senior unsecured notes 1,313
Convertible senior subordinated notes 2
Orion Power 12% notes(1) 431
PEDFA fixed-rate bonds for Seward plant due 2036 500
Channelview(2) --
Retail working capital facility --
Warrants (1)
Other(3) 1
Total GAAP debt 2,996
REMA operating leases (off-balance sheet) 461
Total debt and debt equivalents(4) 3,457
Less:
Cash and cash equivalents (396)
Restricted cash (5)
Net margin deposits (235)
Net Debt, excluding Channelview $2,821
Channelview(2)(5) 320
Net Debt, including Channelview $3,141
(1) Orion 12% notes include purchase accounting adjustments of $31
million.
(2) Channelview was deconsolidated on August 20, 2007.
(3) Other subsidiary debt.
(4) Debt equivalents include off-balance sheet REMA leases of $461
million.
(5) Channelview is net of restricted cash of $19 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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