Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — IPO Roadshow (January 2006)
14 slides from Nrg Energy's IPO roadshow presentation, Jan 25, 2006
Slide 1: Proactive Environmental and Emissions Compliance Strategy
....While Continuing to Implement our Proactive Environmental and Emissions Compliance Strategy... CAIR/CAMR Compliance plans in place TG portfolio has best in class environmental compliance equipment Material reductions in SO2 and NOx through 2010 at Dunkirk and Huntley 2009 - 2010 capex for substa
Slide 2: West Coast Power Purchase Rationale
West Coast Power Purchase Rationale ($ millions) Purchase Price $ 205 Acquired cash(1)(2) (88) Fair value of acquired emissions credits(1) (20) Net Assets Acquired $ 97 EBITDA 2005(1) $ 17 EBITDA 2006(1) $ 13 Purchase Multiple 2005 5.7x 2006 7.5x Operating reserve margins in SDG&E and SCE territorie
Slide 3: Liquidity
Liquidity Ample liquidity to support risk management strategy (1) Excludes additional MTM positions that are secured by a 2nd Lien on the Company's assets (2) Approximately $190 million of returned collateral anticipated in Q1 2006 (3) Excludes 2nd Lien capacity used to secure additional MTM positio
Slide 4: Natural Gas Prices
Natural Gas Prices Hedged power prices remain substantially below the forward curve providing future upside potential (1) Substantially all hedged revenues in 2007 utilize power put options, preserving upside potential (2) Henry Hub Terminal year (2011) gas price required to meet return requirements
Slide 5: Contracted and Hedged Positions
Contracted and Hedged Positions Hedged Solid Fuel Generation TG Baseload generation largely hedged through 2009 High gas/power correlation in ERCOT provides opportunity to hedge out in 2010 and beyond NRG Baseload peak generation fully hedged in 2006 Options based hedge strategy in 2007 establishes
Slide 6: Cash Generation
Cash Generation Combined company expected to generate double digit free cash flow yield even in 2007, the year hedged furthest below current market prices (1) Assumes February 2, 2006 TG closing (2) December 30, 2005 closing share price
Slide 7: Credit Statistics
Credit Statistics (1) 2005 NRG 2006 2007 Gross 2.7 2.6 2.8 Net 2005 NRG 2006 2007 Gross 3.3 4.2 3.8 2005 NRG 2006 2007 Gross 0.54 0.55 0.49 2005 NRG 2006 2007 Gross 0.19 0.14 0.17 Adj. EBITDA/Interest Coverage (X) (2) Total Net Debt/Adj. EBITDA (2) (X) FFO/Total Net Debt (%) Total Debt/Total Capital
Slide 8: Strong Balance Sheet
Strong Balance Sheet ETR 5.8 FPL 4 PSEG 3.1 NRG 2.5 EME 2.1 Reliant 1.7 Dynegy 1.2 FFO Interest Coverage(1)(2) (x) FFO/Debt(1)(2) (%) Total Debt/Capitalization(1)(2) (%) FPL Public Service Enterprise Group NRG Edison Mission Energy Reliant Dynegy ETR 31.8 FPL 20.9 PSEG 14.9 NRG 13.9 Reliant 7.9 EME
Slide 9: Asset Value Over Collateralization
Asset Value Over Collateralization Valuation Based on $/kW Metrics (1) Pro Forma Market Value Baseload Valuation ($/kW) Mid-merit, Peaking Valuation ($/kW) Resulting Aggregate Value 1st Lien Term Loan B Asset Value Coverage Total Debt Asset Value Coverage 1,000 200 $11.4Bn 3.5x 1.6x 1,200 300 $14.5B
Slide 10: Forecast Amortization Schedules
Forecast Amortization Schedules 2006 2007 2008 2009 2010 2011 NRG: NRG power contracts1 $7.6 $18.7 $24.2 $23.7 $20.2 $20.4 NRG emissions credits2 $18.3 $14.1 $14.5 $13.0 $17.7 $15.8 Texas Genco: Texas Genco power contracts $1,326 $1,140 $688 $244 $48 $0 1 Amortization of power contracts occur in the
Slide 11: Regulation G Reconciliations
Regulation G Reconciliations Appendix Table 1: 2005 to 2007 EBITDA to Interest Coverage Net Debt to EBITDA Appendix Table 1: 2005 to 2007 EBITDA to Interest Coverage Net Debt to EBITDA Appendix Table 1: 2005 to 2007 EBITDA to Interest Coverage Net Debt to EBITDA 2005 2006 2007 Numerator Adjusted EBI
Slide 12: Regulation G Reconciliations
Regulation G Reconciliations Appendix 3: 2005 to 2007 Net Debt to Total Capital1 Appendix 3: 2005 to 2007 Net Debt to Total Capital1 2005 2006 2007 Numerator Gross Debt $ 2,918 $ 7,875 $ 7,121 Total Cash $ (452) $ (1,181) $ (1,153) Net Debt $ 2,466 $ 6,694 $ 5,968 Denominator Net Debt $ 2,466 $ 6,69
Slide 13: Regulation G Reconciliations
Regulation G Reconciliations Appendix Table 5: FFO to Net Debt1 Appendix Table 5: FFO to Net Debt1 2005 2006 2007 Numerator Cash Flow From Operations $ 57 $ 1,247 $ 1,015 Less: Working Capital (39) 38 (30) Return of Collateral 433 (406) (27) Pension 13 53 40 FFO $ 464 $ 932 $ 999 Denominator Gross D
Slide 14: Reg. G Reconciliation
Reg. G Reconciliation EBITDA and Adjusted EBITDA are nonGAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of Adjusted EBITDA should not be construed as an inference that