NRG Yield, Inc. to Acquire Largest Wind Farm in North America

  NRG Yield, Inc. to Acquire Largest Wind Farm in North America

   – Alta Wind increases contracted renewable portfolio by 947 megawatts –

Business Wire

PRINCETON, N.J. -- June 4, 2014

NRG Yield, Inc. (NYSE:NYLD) has entered into an agreement with Terra-Gen Power
LLC to acquire the Alta Wind facility located in Tehachapi, Calif., for
$870million, plus the assumption of $1.6 billion of non-recourse project
financings and subject to customary working capital adjustments. The
acquisition, which totals 947 megawatts (MW) of operating wind capacity, also
includes a portfolio of land leases associated with the Alta Wind facility.

NRG Yield intends to fund the purchase price through a combination of newly
issued debt, common equity and cash on hand. The transaction is expected to
increase both the annual run-rate EBITDA by approximately $220million and
Cash Available for Distribution by approximately $70 million (before debt
service associated with acquisition financing) by 2016.

“Alta Wind is a landmark investment for NRG Yield,” said David Crane, NRG
Yield’s Chairman and Chief Executive Officer. “The acquisition of the largest
wind facility on the North American continent highlights not only our
commitment to carbon-free generation, but also the strength of our acquisition
capabilities to compete for contracted assets of world-class quality in the
competitive marketplace. Alta Wind contributes to our objective of sustainable
and visible dividend growth for our investors while supporting the generation
of carbon-free electricity for thousands of homes through large-scale wind.”

Alta Wind Highlights:

  *Contracted long-term power purchase agreements with Southern California
    Edison with 21 years of remaining contract life for phases I-V and 22
    years, beginning in 2016, for phases X and XI
  *Located in a premier wind resource area with over 30 years of wind
    operating history and close proximity to the Los Angeles load center
  *Utilizes 386 GE and Vestas turbines with commercial operations achieved
    within the past four years
  *Immediately accretive to Cash Available for Distribution per share
  *Grows the combined wind portfolio owned by NRG Yield and its parent, NRG
    Energy, to 2,839 MW, making it the fifth-largest overall operating
    portfolio in the North American wind industry

Bank of America Merrill Lynch acted as exclusive financial advisor to NRG
Yield in relation to this transaction and rendered a fairness opinion to the
Board of Directors of NRG Yield. Jones Day served as legal counsel to NRG
Yield.

NRG Yield expects to close the transaction in the third quarter of 2014. The
transaction is subject to customary closing conditions, including the receipt
of regulatory approval by the Federal Energy Regulatory Commission (FERC), the
U.S. Department of Justice and the Federal Trade Commission under the
Hart-Scott-Rodino Act, as well as notice of the acquisition to the California
Public Utilities Commission.

About NRG Yield

NRG Yield owns a diversified portfolio of contracted renewable and
conventional generation and thermal infrastructure assets in the U.S.,
including fossil fuel, solar and wind power generation facilities that provide
the capacity to support more than one million American homes and businesses.
Our thermal infrastructure assets provide steam, hot water and/or chilled
water, and in some instances electricity, to commercial businesses,
universities, hospitals and governmental units in multiple locations. NRG
Yield is traded on the New York Stock Exchange under the symbol NYLD. Visit
nrgyield.com for more information.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements are subject to certain
risks, uncertainties and assumptions and include NRG Yield’s expectations
regarding the anticipated benefits of the acquisition of the assets and
typically can be identified by the use of words such as “expect,” “estimate,”
“anticipate,” “forecast,” “plan,” “believe” and similar terms. Although NRG
Yield believes that its expectations are reasonable, it can give no assurance
that these expectations will prove to have been correct, and actual results
may vary materially. Factors that could cause actual results to differ
materially from those contemplated above include, among others, general
economic conditions, hazards customary in the power industry, weather
conditions, competition in wholesale power markets, the volatility of energy
and fuel prices, failure of customers to perform under contracts, changes in
the wholesale power markets, changes in government regulation of markets, the
condition of capital markets generally, our ability to access capital markets,
unanticipated outages at our generation facilities, adverse results in current
and future litigation, failure to successfully close the acquisition
(including receipt of third party consents and regulatory approvals), our
ability to enter into new contracts as existing contracts expire and our
ability to maintain and grow our quarterly dividends and our ability to
satisfy closing conditions and obtain regulatory and other consents in
connection with the acquisition.

NRG Yield undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. The foregoing review of factors that could cause NRG Yield’s actual
results to differ materially from those contemplated in the forward-looking
statements included in this news release should be considered in connection
with information regarding risks and uncertainties that may affect NRG Yield’s
future results included in NRG Yield’s filings with the Securities and
Exchange Commission at www.sec.gov. In addition, NRG Yield makes available
free of charge at www.nrgyield.com, copies of materials it files with, or
furnish to, the SEC.

Appendix A-1: Adjusted EBITDA and Cash Available for Distribution
Reconciliation

The following table summarizes the calculation of adjusted EBITDA and cash
available for distribution to net income:


                                                               Run Rate
($ in millions)
Net Income                                                       10
Adjustments to net income to arrive at Adjusted EBITDA:
Depreciation and amortization                                    100
Interest expense, net                                            85
Income tax expense                                               25
Adjusted EBITDA                                                  220
Cash interest paid                                               (85)
Maintenance Capital expenditures and changes in other assets     (5)
Principal amortization of indebtedness                         (60)
Cash Available for Distribution                                70


EBITDA and Adjusted EBITDA are non-GAAP 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 NRG Yield’s future results
will be unaffected by unusual or non-recurring items.

EBITDA represents net income before interest (including loss on debt
extinguishment), taxes, depreciation and amortization. EBITDA is presented
because NRG Yield considers it an important supplemental measure of its
performance and believes debt-holders frequently use EBITDA to analyze
operating performance and debt service capacity. EBITDA has limitations as an
analytical tool, and you should not consider it in isolation, or as a
substitute for analysis of our operating results as reported under GAAP. Some
of these limitations are:

  *EBITDA does not reflect cash expenditures, or future requirements for
    capital expenditures, or contractual commitments;
  *EBITDA does not reflect changes in, or cash requirements for, working
    capital needs;
  *EBITDA does not reflect the significant interest expense, or the cash
    requirements necessary to service interest or principal payments, on debt
    or cash income tax payments;
  *Although depreciation and amortization are non-cash charges, the assets
    being depreciated and amortized will often have to be replaced in the
    future, and EBITDA does not reflect any cash requirements for such
    replacements; and
  *Other companies in this industry may calculate EBITDA differently than NRG
    Yield does, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA should not be considered as a measure of
discretionary cash available to use to invest in the growth of NRG Yield’s
business. NRG Yield compensates for these limitations by relying primarily on
our GAAP results and using EBITDA and Adjusted EBITDA only as supplements. See
the statements of cash flow included in the financial statements that are a
part of this news release.

Adjusted EBITDA is presented as a further supplemental measure of operating
performance. Adjusted EBITDA represents EBITDA adjusted for mark-to-market
gains or losses, asset write offs and impairments; and factors which we do not
consider indicative of future operating performance. The reader is encouraged
to evaluate each adjustment and the reasons NRG Yield considers it appropriate
for supplemental analysis. As an analytical tool, Adjusted EBITDA is subject
to all of the limitations applicable to EBITDA. In addition, in evaluating
Adjusted EBITDA, the reader should be aware that in the future NRG Yield may
incur expenses similar to the adjustments in this news release.

Cash available for distribution is Adjusted EBITDA plus cash dividends from
unconsolidated affiliates, less maintenance capital expenditures, pro-rata
adjusted EBITDA from unconsolidated affiliates, cash interest paid, income
taxes paid, principal amortization of indebtedness and changes in others
assets. Management believes cash available for distribution is a relevant
supplemental measure of the Company’s ability to earn and distribute cash
returns to investors.

Contact:

NRG Yield, Inc.
Media:
Karen Cleeve, 609-524-4608
or
Investors:
Chad Plotkin,609-524-4526
or
Daniel Keyes, 609-524-4527
 
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