Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Merger or Acquisition (July 2009)
11 slides from Nrg Energy's merger presentation, Jul 13, 2009
Slide 1: NRG: Continuous Creation of Real, Meaningful Value for Shareholders
NRG: Continuous Creation of Real, Meaningful Value for Shareholders July 13, 2009
Slide 2: Safe Harbor Statement
Safe Harbor Statement Important Information In connection with its 2009 Annual Meeting of Stockholders (the "2009 Annual Meeting"), NRG Energy, Inc. ("NRG") has filed a definitive proxy statement on Schedule 14A with the Securities and Exchange Commission (the "SEC"). INVESTORS AND STOCKHOLDERS OF N
Slide 3: NRG: Creation of Real, Meaningful Value for Shareholders
NRG: Creation of Real, Meaningful Value for Shareholders Exelon's Claim "Exelon has significant upside earnings potential, while NRG faces revenue deterioration" "The difference between NRG's and Exelon's valuation of Reliant is much smaller than NRG asserts" "The Transaction is Equitable on a Free
Slide 4: Exelon Exchange Offer of 0.545 = Implied Ownership of 18%
Exelon Exchange Offer of 0.545 = Implied Ownership of 18% Claim 1. "Exelon has significant upside earnings potential, while NRG faces revenue deterioration" Slide 29 of Exelon July Presentation; 2. Percentages sold and average prices in blue as disclosed in NRG's 2008 Form 10-K. 2010-2011 average pr
Slide 5: The difference between NRG's and Exelon's valuation of Reliant is much smaller than NRG asserts
Claim 2. "The difference between NRG's and Exelon's valuation of Reliant is much smaller than NRG asserts" Exelon finds only $1 per share of value ($270 million) for an asset that produces $250M of mid cycle EBITDA and over $400M in last eight months of 2009 Ongoing Retail Valuation ($ millions) NRG
Slide 6: The Transaction is Equitable on a Free Cash Flow Basis
Claim 3. "The Transaction is Equitable on a Free Cash Flow Basis" EXC should account for ALL adjustments, not just NRG's leverage. More 'selective exclusion' by EXC in calculating financial metrics If Exelon wants to adjust EBITDA for leverage, EXC should adjust for the other factors between EBITDA
Slide 7: NRG faces $1.3 - $2.3 billion of environmental compliance costs
Claim 4. "NRG faces $1.3 - $2.3 billion of environmental compliance costs......" NRG's Environmental CapEx Program exceeds original Clean Air Interstate Rule and unit by unit MACT requirements Exelon fails to highlight cost recovery plus return provided in Big Cajun offtake contracts - likely to off
Slide 8: While Exelon has significant carbon upside
Claim 4. "......while Exelon has significant carbon upside." NRG Exelon reiterates that they have upside of $1.1B of EBITDA on an annual basis, while NRG has downside from carbon legislation The effects of carbon on each company has been recognized since October, and the market has not reacted Howev
Slide 9: Exelon's low risk, low cost uprates vs. NRG's new nuclear build
Claim 5. "Exelon's low risk, low cost uprates offer better value than NRG's high risk, high cost new nuclear build" Would you rather spend $3.5B of equity capital on plants with 20-30 years of remaining life (the Exelon Way) or $600M of equity capital on assets with a 60 year useful life (the NRG Wa
Slide 10: Real synergies equal real value
Claim 6. "Real synergies equal real value" NRG shareholders would benefit from receiving 18.2% of the realized synergies $49 MM of after-tax contribution based on Exelon's mid-point synergy estimate Exelon NRG The Current Share of "Estimated" Synergies is Dilutive to what NRG Shareholders Can Realiz
Slide 11: NRG: A Track Record of Growth and Financial Success
2004 2005 2006 2007 2008 2009E EBITDA 0.976 0.731 1.502 2.279 2.291 2.5 Stock Price 18.03 23.56 28.01 43.34 23.33 23.24 Adjusted CFO 0.71 0.489 0.923 1.633 1.5 1.769 Financial Performance Focused on Cash Generation ... .... with substantial benefits realized by shareholders until the market dislocat