NRG Yield, Inc. Completes Acquisition of NRG Right of First Offer Assets

  NRG Yield, Inc. Completes Acquisition of NRG Right of First Offer Assets

       – Raises Dividend Growth Target and Updates Financial Guidance –

Business Wire

PRINCETON, N.J. -- June 30, 2014

NRG Yield, Inc. (NYSE:NYLD) has completed its previously announced acquisition
of three Right of First Offer (ROFO) assets from NRG Energy, Inc. for $349
million in total cash consideration, plus assumed project debt of $657 million
(as of March 31, 2014) excluding adjustments for working capital. The
acquisition, which totals 590 megawatts (MW) of operating capacity, includes
the following assets:

  *El Segundo Energy Center, a 550 MW fast-start, natural gas-fired facility
    in LA County, California;
  *TA High Desert, a 20 MW photovoltaic solar facility in LA County,
    California; and
  *RE Kansas South, a 20 MW photovoltaic solar facility in Kings County,
    California

“The completion of the first-ever drop-down from NRG Energy demonstrates NRG
Yield’s ability to successfully transact with its strategic sponsor and lays
the foundation for robust long-term growth,” said NRG Yield’s Chairman and
Chief Executive Officer David Crane. “When coupled with both the pipeline of
NRG Yield-eligible projects owned by our parent company, NRG Energy, and the
recently announced Alta Wind acquisition, this platform-proving transaction
gives us the confidence to raise our long-term dividend growth target for NRG
Yield.”

Increasing Targeted Dividend Growth Rate

Primarily driven by positive year to date results and the closing of the first
ROFO transactions, the Company is now targeting an annualized dividend of
$1.50 per share by the 4th quarter of 2014, which represents a 25% increase to
NRG Yield’s initial annualized dividend of $1.20 per share. Further, with a
pipeline of nearly 2.1 GW of assets identified by NRG as being eligible for
drop-down and giving effect to the pending acquisition of the 947 MW Alta Wind
portfolio, NRG Yield is also raising its 5-year target dividend per share
compound annual growth rate to 15-18% from 10-15%.

Updating Financial Guidance^1

As a result of the completed acquisition, NRG Yield is raising its full-year
2014 Pro-Forma Adjusted EBITDA guidance to $410 million, from $292 million,
and Cash Available for Distribution (CAFD) guidance to $140 million, from $115
million. The Company is also reaffirming 2nd quarter Adjusted EBITDA guidance
of $75 million and CAFD guidance of $22 million.

This updated Adjusted EBITDA and CAFD guidance excludes any impact associated
with the recently announced Alta Wind acquisition, which is expected to close
by the end of the 3rd quarter.

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 Alta assets and
other assets identified by NRG as being eligible for acquisition. These
forward-looking statements 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 Alta acquisition (including receipt of third party consents and
regulatory approvals), failure of NRG to ultimately offer assets to us that
have been identified eligible for acquisition, our ability to enter into new
contracts as existing contracts expire and our ability to maintain and grow
our quarterly dividends.

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: Pro-Forma Adjusted EBITDA and Cash Available for Distribution
Reconciliation

The following table summarizes the calculation of 2014 Full-Year Pro-Forma
Adjusted EBITDA and Cash Available for Distribution to net income:

                                                                  
                            6/30/14      5/6/14
                                 2014             Second          2014
($ in millions)                                      
                                 Full             Quarter         Full
                                 Year^2                           Year
Net income/(Loss)            135          28          95
Plus:                                               
Income tax                   24           (4)         14
Interest expense, net        106          21          65
Depreciation and             93           16          65
amortization
Contract amortization        2            1           1
Adjustments to reflect
NRG Yield’s pro-rata                                
share of Adjusted
EBITDA from
unconsolidated               50           13          52
affiliates
Adjusted EBITDA              410          75          292
Less: Pro-rata Adjusted
EBITDA from                  (73)         (21)        (72)
unconsolidated
affiliates
Add: Cash distributions
from unconsolidated          43           6           41
affiliates
Cash interest paid           (99)         (16)        (63)
Maintenance capital          (17)         (5)         (13)
expenditures
Change in other assets       (15)         (9)         1
Principal amortization       (110)        (8)         (71)
of indebtedness
Estimated Cash Available     140          22          115
for Distribution
Less: Estimated Cash
Available for
Distribution from ROFO       –                       
assets through June 30,
2014
Pro-Forma Estimated Cash
Available for                140                     
Distribution
                                                             

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.

^1  In accordance with GAAP, financial results for these ROFO assets are
     incorporated as of January 1, 2014.
^2   In accordance with GAAP, financial results for these ROFO assets are
     incorporated as of January 1, 2014.
     

Contact:

NRG Yield, Inc.
Media:
Karen Cleeve, 609-524-4608
or
Investors:
Chad Plotkin, 609-524-4526
Daniel Keyes, 609-524-4527
 
Press spacebar to pause and continue. Press esc to stop.